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Plan Well, Retire Well

Saving and investing your money

Help someone you know get their Rebate (Economic Stimulus Payment)

I was on vacation last week, visiting with my family in Virginia. That's why this post is late. While we were relaxing and chatting about different things, I discovered that my nephew did not have to file income taxes this year - but he would be eligible for a $300 Economic Stimulus Payment if he did! All he has to do is file, and it's not too late!

I'll bet that you know a friend, retiree, family member, or maybe even a part-time coworker who is also eligible for a rebate, even though they weren't required to file due to the amount or type of income they received. Generally, single people with gross income of less than $8750 and married couples with income of less than $17,500 don't have to file. (For details, see IRS Topic 351 - Who Must File?)

You need at least $3000 of qualifying income to get a rebate. According to the IRS Economic Stimulus Payments Information Center, these kinds of income count toward the $3000, even if the person paid no income tax last year:

  • Social Security benefits
  • veterans' disability compensation, pension or survivors' benefits from the Department of Veterans Affairs
  • Railroad Retirement
  • wages
  • self-employed income
  • military combat pay

If you have at least $3000 in total qualifying income, you're eligible for a $300 payment, or $600 for a married couple. You may also receive an additional $300 for each qualifying child.

However, you cannot get the rebate if you are a dependent of another taxpayer. So this doesn't apply to a 16 year-old who made $3000 mowing lawns or working at the community pool last summer if her parents claimed her on their tax return.

You have until October 15, 2008 to file your income taxes and qualify for your rebate check.

There's more good news: You can file online for free if you aren't normally required to file income taxes and the only reason you're filing is to get your rebate check. Find a list of Free File providers on the IRS website.

Or, just file a simple paper return. According to the IRS, here's all you have to do if you're a low income worker:

  • Use either Form 1040A or Form 1040. Write the words "Stimulus Payment" at the top:

  • Enter your name, address, Social Security number (SSN), and filing status on the form. Add qualifying children (dependents) and their SSNs to the Exemptions section.

  • Enter your earned income on Line 7 of either form.

  • Total up any of the other three types of qualifying income and write that total on line 14a if you use Form 1040A, or on line 20a of Form 1040.

  • Sign and date the form. Then mail it to the IRS service center for your area.

For instructions specific to other types of income, view the fact sheets for Social Security, Veterans benefits, or Railroad Retirement. Each of these fact sheets is also available in Spanish. There is also a page about military combat pay.

Some people may not be eligible. You (and your spouse, if married) must have a Social Security number. Taxpayers with an Individual Taxpayer Identification Number (ITIN) instead of an SSN are not eligible to receive a stimulus payment except for the spouse or child of married military personnel.

Unless you owe additional taxes, there's no penalty for filing after April 15. If you weren't required to file, or if you are owed a refund, there is no penalty. Want to know more? Read the details.

Now, do someone a favor! Share this information and help some of your friends, clients, retirees, or family members get their money!

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