Taxpayer asks:
my friends told me that the IRS is deducting the stimulus check money from your 08 return! I thought it was free money! And now we have to give it back?
Taxgirl says:
Deep breaths. You don’t have to give it back.
Here’s the confusion… The last set of stimulus checks in 2001 were advances against credits on the 2002 returns. That meant that you did have to “give it back” when you filed in 2002. When the new stimulus package for 2008 was announced, many folks assumed that it would work the same way as the last. CNN even reported it that way initially. But these rebate checks are different.
I’ve taken a peek at the 2008 form 1040 and instructions and it confirmed my earlier report. The “Recovery Rebate Credit” is clearly marked as a credit available for those who did not receive a rebate check in 2008. You do not claim the credit if you have already received your check in the proper amount – and as a result, your 2008 taxes are not affected.
Let me say that one more time, with feeling: if you received your full rebate check in 2008, your 2008 taxes will not be affected.
Don’t be scared by the word “credit” – it’s really just a technical way of making adjustments for folks who might not have received a check in 2008 or if income from 2007 resulted in a smaller check than a taxpayer was really entitled. In other words, the credit can only help, not hurt you, at this point. If you’ve received your check, cashed it and spent it (as the government hopes you have), you’re fine. You don’t have to give anything back with respect to your rebate. I can’t vouch for the rest of your return – that’s on you! 
By the way, this is my second most popular question so far in 2009 (#1 is when are we getting a second stimulus check?).
Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.
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If we already filed our 2008 taxes but did not claim the RRC for a child born in 2008…what can we do now to get the RRC?
If you forgot to claim him or her altogether, try: http://www.taxgirl.com/ask-the-taxgirl-forgotten-dependent/
If it’s just a matter of figuring the credit, IRS should figure it for you if the dependent was included on the actual return. Once your refund arrives, if there’s no indication that the credit was included, I’d call IRS (800.829.1040)
Hi Kelly!
Basically, my situation is similar to Cindy’s one:
I have a Social Security Number, but my wife and my son have only Individual Taxpayer Identification Number (ITIN)… I used TurboTax and was somehow mistaken by it, so I requested $900 of RRC ($600+$300 for the son), and got the money! Now I undestand we are not eligable for this money. What should I do in the situation like this?
Should I try to return the money and how can I do that?
Thank you!
Jeez, the last time that I answered one of these, I advised the taxpayer to do the right thing. She later sent me a blistering email saying that she could have cheated and she found out later that it would have worked and instead she followed my advice to be honest, she’s out $300 and she blames me. Lovely, huh?
So I will say this. If you believe that you didn’t get the correct amount of money – either too much or too little – I would contact the IRS to confirm the proper amount. It tends to be the case that an overpayment will be discovered eventually. If and when it’s discovered, not only will you have to pay it back, you’ll likely be hit with interest and penalty.
Bottom line, I always believe that if you don’t think that you received the proper amount, confirm with IRS.
Yes, I have just “broke through” teh IRS automatic answering system and spoke with a representative. She told me we do not eligable for RRC ‘coz my wife has no real SSN but ITIN only . So now I have to send a check with amount received, and a cover letter describing the situation directly to US Treasure.
Hello,
We filed a 1040 last year but myself and my child did not have a valid ss no hence we were not issued stimulus checks. We filed 1040 again this year but we do have the ss nos fo both of us. Can we file 1040x and claim recovery rebate on the 2008 return if so, what would be the procedure on what line of 1040x do we claim rr? Or, is there any other form to file?
I’m not sure why you would file an amended return for 2007 if the sole purpose is to claim the RRC. If that’s the only reason, then you can just file a return for 2008 with your updated info.
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