ECONOMIC STIMULUS PACKAGE

Several people have asked questions recently about the tax package that has been in the news a lot (The Economic Stimulus Act of 2008). Much of the mud has cleared, so I wanted to pass along some of that information ...

Congress and President Bush have signed the stimulus package into law, providing payments to an estimated 130 million American households. Under the new law, you may be entitled to a payment of up to $600 per individual ($1,200 if filing a joint return), plus an additional amount of $300 for each child qualifying for the child tax credit. This one-time payment will begin being sent in May.

To receive a payment in 2008, individuals who qualify won't have to do anything more than file a 2007 tax return. The IRS will determine eligibility, calculate the amount of the refund, and send the payment. [This should not be confused with any tax refund you may be due this year - any tax refund for your 2007 return will be made separate from this payment].

For individuals who normally do not have to file a tax return [most college students will fall into this category], this new law provides for payments to people who have a total of $3,000 or more in earned income, Social Security benefits, and/or certain veterans' payments. Those individuals should file a tax return for 2007 in order to receive this payment in 2008. Individuals that qualify may receive as much as $600 ($1,200 for joint return). Even if no income tax is owed/paid, as long as there is $3,000 or more in earned income, you may receive a payment of $300 ($600 if married filing jointly). The payment will be reduced or phased out for taxpayers with adjusted gross income of more than $75,000 (or more than $150,000 if married filing jointly).

TO QUALIFY:
--> $3,000+ in earned income in 2007
--> File a 2007 tax return [even if no taxes were owed]
--> Must have a valid Social Security number
--> Must NOT be claimed as a dependent of another taxpayers

Everyone receiving payments will receive a notice and additional information shortly before the payment is made in May. In the meantime, you can get more information at the IRS website (www.irs.gov).