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.
Have a question? Ask the taxgirl! – Now on Facebook!
It’s time for our annual review! Here are my picks for the top stories on taxgirl.com for the year:
10, Dancing With The Stars champ and race car driver Helio Castroneves is indicted on federal tax evasion charges. In a related story, my mother is stricken with grief and may never samba again (okay, I’m not sure that she sambaed before but I’m pretty sure that this will end any chance).
9, Prop 8 in California passes and prompts the promise of tax boycotts by the gay and lesbian community.
8, taxgirl endorsed Obama for President. I was both roundly cheered and jeered for my picks but stand behind my choice. One of my most controversial and commented posts of the year.
7, Tax evaders hit the slopes. A massive tax fraud investigation in Germany, the UK, the US and other countries points the finger at the tiny Alpine principality of Liechtenstein. I am elated to finally have a reason to prove that I can spell Liechtenstein.
6, After Congress says no, President Bush says yes and earmarks taxpayer dollars to save the Big 3 automakers. As a result, Fiat misses its chance to hit it big in the US.
5, Wesley Snipes is acquitted of tax fraud. Remarkably, the world did not end, though we will now be subjected to more of his movies.
4, Congress commits US taxpayers to a remarkable bailout package. Treasury Secretary Paulson is now more powerful than Oprah.
3, The “biggest tax fraud ever” tax trial finally reaches an end. Out of the original 19 defendants involved in the spectacle that was the KPMG trial, only 3 were eventually convicted.
2, Rebates, rebates and rebates. I probably posted the most – and received the most comments – about this year’s rebate checks. Taxpayers were confused about the amount of the check, set-offs, when checks might arrive and more. An overwhelming majority of Americans admitting to being as cynical about the chances of the checks stimulating the economy as they are about Paula Abdul “just being tired.”
1, taxgirl gets a nod by the editors of the American Bar Association in the ABA Journal Blawg 100 for 2008. In case you missed it before, voting by readers for the best of the blawgs runs through January 2 – just click to vote. And no, this tidbit never gets old (not for me, anyway)!
So those are my picks for the year. What did you like? What did you hate? And what did I miss?
Despite rumblings for a second stimulus check, the IRS hasn’t finished delivering the first stimulus check to all taxpayers. As of last month, more than 279,000 economic stimulus checks – that’s more than a quarter million – were yet to be delivered. Those checks are worth more than $163 million.
Additionally, more than 104,000 taxpayers didn’t receive their regular refund checks this year due to mailing address errors.
Bottom line: update your address with the IRS. You can do so by filing a federal form 8822, Change of Address, with the IRS. Don’t forget to change your address with the U.S. Postal Service (you can do it online by clicking here).
You can check the status of your stimulus check here or by calling 1-866-234-2942. The IRS is required to mail out stimulus checks by December 31. Make sure that you have made every effort to get yours.
You can check the status of your regular refund check here or by calling 1-800-829-1954.
If you simply haven’t filed yet, don’t worry. Eligible taxpayers can receive a payment in 2009 by filing an income tax return when the filing season opens in January. Oh yeah, we’re that close to “the season.”
Taxpayer asks:
We claimed our son last year on our taxes. Born April 1989. We have a daughter who is 16. We recieved $1500 stimulus check. None for our son and he didn’t get one for himself either. Should he have? Thank you.
Taxgirl says:
Sorry, no. Eligible taxpayers received an additional $300 for each qualifying child. However, to qualify a child must be under age 17 as of December 31, 2007. So, if you claimed your (then) 18 year old son on your return, he would not have qualified to receive a check on his own as your dependent – and you would have not received a payment for him because of his age.
I know, I know. I’ve heard a bunch of complaints about this one…
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.
Have a question? Ask the taxgirl!
