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Calculate Your Economic Stimulus Tax Rebate Print
Thursday, 14th February 2008 (by J.D.)This article is about News, Planning, Taxes, Tools
President Bush has signed the economic stimulus package into law. This plan provides tax breaks to businesses that invest in capital equipment, temporarily allows larger mortgages through the Federal Housing Administration (and related entities), and provides a personal income tax cut for 2008. Instead of passing this on when we file taxes next year, the IRS will mail a tax rebate check to most Americans this summer. This is an advance on the reduced taxes for 2008.
How much will you get back? Flexo at Consumerism Commentary recently shared a handy little tax rebate calculator, which I’ve reproduced below:
The tax rebate will have no effect on your 2007 tax return, which you’re probably working on right now. These changes are for the current year. According to the IRS web site:
- The vast majority of Americans who qualify for the payment will not have to do anything other than file their 2007 individual income tax return to receive their payment this year.
- The IRS will use information on the tax return to determine eligibility and calculate the amount of the stimulus payments.
- Taxpayers should be aware that there are identity theft scams involving the proposed advance payment checks (known informally as rebates to many Americans).
Checks will be sent out beginning in May. For more information, read facts about the 2008 stimulus payments from the IRS. Finally, Kathleen Pender at the San Francisco Chronicle was the best source I found on how tax rebates work in the economic stimulus package.
As always, the information in this post is correct to the best of my knowledge. If you spot an error, please let me know so that I can correct this article.
February 14th, 2008 at 11:36 am
The plan states $600 for individuals and $1200 for married couple. But when I do the calculator I only get $300?
I don’t understand how they figure the amount you get if you file Single. I file single and AGI was 29,000
February 14th, 2008 at 11:50 am
This is a real switch. Normally the governemtn witholds their share of the taxes (for employees) from each paycheck. Now they are giving an “Advance”. Somehow this sounds like it will come back to bite someone in the behind.
Enjoy it while it lasts I guess!
February 14th, 2008 at 11:56 am
Yes, this calculator is incorrect. Wife and I file jointly, total income was 120K, with 1 child. That should be 1200 + 300 = 1500, but this calculator showed 900.
February 14th, 2008 at 12:24 pm
So can somebody help me out here… Since this is an ‘advance’ on the 2008 taxes, does this mean that if I would get a refund when I file my 2008 taxes on April 15th 2009, that refund would be reduced by the amount of the advance? Or are they cutting taxes such that I would get something in the ballpark of my normal refund plus $1200?
In other words: this is not the ‘free money’ its being billed as, but rather more like a payday loan with no interest, correct?
February 14th, 2008 at 12:28 pm
Thanks folks, for pointing out the errors. Please continue to post mistakes, including your info if you’re willing to share it. I’ll try to contact the guy who did the calculator to see if he can correct it.
February 14th, 2008 at 12:30 pm
icup, here’s the deal:
For the year 2008, there will be this stimulus rebate. Instead of waiting till you file your ‘08 tax return (next year), you will be getting this stimulus rebate early, in either late spring or early summer.
This rebate does not change your taxes otherwise. It does not affect your ‘08 return in any other way. You’ll still be paying the same taxes (and getting the same normal refund or tax bill) next year.
February 14th, 2008 at 12:33 pm
The calculator is correct. Since this is a tax rebate of your 2008 taxes you must put in a “Net Income Tax Liability”. If you put in a zero you will get the minimum rebate amount given to those who pay no taxes but still have income, which is $300 for a single and $600 for a couple. I made the same mistake myself the first time I used the calculator.
February 14th, 2008 at 12:43 pm
Those who are reporting errors, please make sure you’re entering correct values for earned income, AGI and your full 2007 tax liability…
Rob Z: what are the values you used for each field? If you used 150000 for earned income and 150000 for AGI, and 0 for tax liability, then your credit is in fact 900. If you owed tax throughout 2007, which most likely you did, say 12000, then your credit is 1500… and the calculator handles that appropriately.
February 14th, 2008 at 12:54 pm
To Jnetty:
The “plan” does NOT state $600 for individuals and $1200 for married couples. The basic rebate is the LESSER of your net income tax liability or $600 ($1200 for married couples), so your rebate could be anywhere from 0 to $600. If you qualify for the Special Provisions (added by the Senate), you will receive a minimum of $300 (or $600 for married couples) + $300 for each qualifying child.
To Rob Z:
See above. What was your net tax liability? I’m guessing it was less than $900, or you left the field blank.
To cup:
The rebate will not reduce or increase your 2008 tax refund. Technically, they are giving you a refundable credit against next year’s tax bill, but they are giving it to you in June. If it turns out, based on your 2008 tax return, you should have received a larger credit, you will get in in 2009. If it turns out that you should have received a smaller rebate, you get to keep the difference.
To J.D:
None of the “errors” reported above are errors. I have numerous CPA’s and tax preparers using and reviewing the calculator. If there are any real errors, they will let me know, and I will fix them.
February 14th, 2008 at 1:05 pm
I have no earned income and no social security. I do have pension and investment income. So all the the fields in the calculator are 0 except for total adjusted income and tax liability. It is calculating a $600 rebate. Is this right? I thought you had to have earned income or social security?
February 14th, 2008 at 1:37 pm
Tyler and icup,
The rebate is an advance on a new credit created for 2008. The money doesn’t have to be repaid. I explain more in my article:
http://moneymyths.org/blog/2008/02/14/tax-rebate-confusion/
February 14th, 2008 at 1:37 pm
So since I have a baby on the way this year, I’ll be able to claim an extra $300 credit on my return next year?
February 14th, 2008 at 1:59 pm
Tablespork,
Yes, you’ll get the $300, but this is how it will work: You will claim the new dependent. This will increase your credit under the stimulus act. Then you will subtract the rebate you received, leaving the $300. Same end, but the process is important. It’s not an extra credit, there is just one credit calculated on your 2008 taxes. The rebate is an estimate based on 2007.
February 14th, 2008 at 2:17 pm
What I’m most curious about is HOW most people plan to use the money that they’re going to get! Are you going to save it, invest it, spend it, hide it under your mattress? JD, you should add a poll widget so that people can vote on what they’re planning on doing with the cash. Personally, I plan to use it to pay off some debts.
-Rich.
February 14th, 2008 at 3:11 pm
Rich man million asks how most people plan to use the money. According to surveys done, most say they will save it or pay off debts.
But here is what “most” will really do with it. A friend works at Walmart. Last weekend they had a huge run on big screen tvs and other electronics. For three days in a row, electronics sales were running over 60% above the same period last year. The news that the rebates are coming already has people spending it! My friend helped several of the big screen tv buyers haul and load these big boxes out to their vehicles and they told her that is what they were doing, buying these new tvs with their rebates on their credit cards, rather than wait for the checks. She overheard one couple arguing about how big a tv to buy because they were not sure how much a rebate they got per child. They had 4 kids with them. To me this says most people are just getting further in debt. I know this is what Washington wants Americans to do with this money, but to me it is a sad commentary on the mind of of most citizens that they are conditioned to spend rather than save or pay down current debts.
February 14th, 2008 at 3:20 pm
Ther was a report that they expect 45% to go to paying debt and 30% to savings, 25% to buying new stuff!
February 14th, 2008 at 3:48 pm
Patty,
you do not need earned income to be eligible for the “pre-bate”
your investment income qualifies you
so even trustafarians qualify
February 14th, 2008 at 4:22 pm
just enter 3001 into the net income tax liability field (unless you actually were liable for less than 3001) and you’ll get the right amount. any number over 3001 doesn’t change the result
February 14th, 2008 at 4:38 pm
Man, if i had 99 kids i’d be getting over $30k!
February 14th, 2008 at 5:06 pm
Site is down, now.
February 14th, 2008 at 5:40 pm
@TheMightyQuinn - not possible from one wife, therefore child support payments would totally swallow up any extra income
February 14th, 2008 at 7:40 pm
What’s more interesting to me than this calculator, is what my taxes are going to look like next year. If I read things correctly, the rebate is going to wipe out my federal tax completely.
I’m normally a person who takes the child tax credit and the saving for retirement credit. You can’t take more credit than you have tax, so if my read is correct, I’m going to want to do less pre-tax saving next year and more after-tax saving. That was a bit of a surprise for me.
February 15th, 2008 at 7:17 am
1200, woohoo! All going toward my student loan as emigrant direct % is now less than my student loan % :(. But that means I’ll be 100% debt free by EOY.
February 15th, 2008 at 7:22 am
[...] thinks we are on the edge of a major recession and they want you to spend this money. Check out getrichslowly.org for some more information on the package and a calculator that you can use to figure out how much [...]
February 15th, 2008 at 9:51 am
J.D.-
Thanks for the heads up, looks like we’ll be getting a nice check this summer.
February 15th, 2008 at 11:04 am
Can anyone clarify for me if both federal income tax and self employment tax count. I read the IRS web site and the examples all list ‘federal income tax.’ we pay no federal income tax but do pay self employment tax exceeding $4000 annually.
February 15th, 2008 at 3:51 pm
This calculator is based on a previously drafted stimulus package, not the actual signed one. A more accurate determination can be seen by hopping over to Kiplinger’s
February 15th, 2008 at 7:14 pm
Nathan: This calculator is based on the final bill passed by Congress and signed by President Bush.
February 15th, 2008 at 7:36 pm
Thanks for the clarification. I get the correct calculation now, whereas earlier today I must have either entered a number incorrectly, or it worked differently at that point. Earlier, it seemed to put a cap at 1500, in spite of the fact that I have 3 kids.
February 16th, 2008 at 10:28 pm
I was really looking forward to using the rebate as an emergency fund, but no such luck.
February 18th, 2008 at 7:28 am
I cam US for the first time in Sept 2007 and this is the first time I a filing the returns. Is it true that I wont be eligible for this stimulus return as I haven’t filed returns in the previous year? Can you please hel me with an answer….
February 18th, 2008 at 1:49 pm
I’m pretty sure you’re still eligible if you’re filing for the first time.
February 26th, 2008 at 12:36 pm
Bhadran, It depends. Eligibility for the credits is based on 2008 tax returns, so as long as you earn inside the min/max limits in 2008, you will receive the credit.
The advances that are scheduled to go out as early as May are based on 2007 tax returns. If your 2007 tax return doesn’t meet the qualifications, then you will get the credit you qualify for when you file your 2008 taxes next year. If your 2007 tax return does qualify, you’ll get the advance.
February 27th, 2008 at 8:50 am
The form allows for more than two qualifying children. I do believe only two are allowed. So if you have three kids, people would be likely to write a three which would skew the result. That is what I did the first time around. If I am right it might be best to put a limit on that field or calculate as two if the number is equal than greater than two. If I am wrong, I will be happy with the extra 300
February 28th, 2008 at 8:58 am
if a person owes and is not getting a refund on their 2007 taxes are they still eligible for a check? i owe 3000 on fed taxes so does that knock me out?
February 28th, 2008 at 2:06 pm
Sue,
The only thing 2007 taxes is used for is to determine eligibility for advance payment. Your 2008 tax situation will determine whether or not you receive the credit if your 2007 doesn’t qualify you. If you owe $3,000 in federal taxes, you will qualify as long as you aren’t single earning over $75,000 or married earning over $150,000. As long as you don’t exceed those limits, you appear qualified for the advance payment as well.
March 3rd, 2008 at 12:51 pm
Hmm ! I am confused ..I am filing married jointly and with 2 kids should get $1200 300 for each child which = $1800 - the calculator gives me $1200 - anyone know why ??
March 4th, 2008 at 6:19 pm
I am american with ss number, two kids both have ss number. My wife has a ITIN #, but irs states I will not get rebate check, because we filed jointly. What about myself and two kids who are born americans all with a valid ss #. Only reason my wife is still using itin I’m in military and we have yet moved to usa. Am I reading this plan correctly?
March 8th, 2008 at 12:12 pm
I’m very excited to get some of my own money back. My wife is a full time student and our only debts are the mortgage and student loans. I made $46,633 last year with 2,014 tax liability; so we’ll get the full $1200 which will go to a furnace and installing the duckworth in our house. Our regular tax refund of $4,186 (oregon and fed) will go to pay student loans.
March 15th, 2008 at 3:18 pm
My wife and I file jointly, although she’s a stay at home mom (3 kids). I made about $110,00 last year. Because she doesn’t have an income, are we out of luck? Thanks.
March 16th, 2008 at 11:34 pm
Sarah (26.), the popular tax software I’m using calculates the rebate, and appears to NOT count self-employment tax. So my guess is you’ll get the minimum payment, $300 per person, based on your having > $3000 self-employment “qualifying” income. Unless your AGI is too high (since your schedule C earnings show up in your AGI).
The possibly good news is that the economic stimulus law also increased Section 179 limits for 2008 and added some sort of increased depreciation. So I guess you’re being stimulated to buy $250,000 of business equipment
(Google “economic stimulus business deduction” for info).
eamonn, when you file jointly everything is lumped together, so your wife not being an earner shouldn’t matter, just the total, AFAIK.
March 17th, 2008 at 9:01 pm
Paul C, thanks for your reply, I hope you’re right!
March 27th, 2008 at 8:41 am
Confusing about the qualifying child. If you go to the IRS site it says that you can claim a child as a dependent as long as they are under age 19, but in order to claim “child tax credit” they have to be under age 17 at the end of the tax year. So, I claim my son who turned 17 mid-November, as a dependent, supporting him 100% of the year, and can’t claim tax credit for him. He is still depending on my support 100% until he graduates from high school or gets a job, and if he is not working and filing his own tax forms then why shouldn’t I be able to claim him as a child tax credit. I would like him to have a job too, but finishing high school successfully is the top priority right now. I think that rule needs to be revised to say under the age of 18 instead, because they are taking away that one last year of credit that a child is, 9 out of 10 times, living in the home and still dependent on the parental support while finishing their general schooling. They can determine if that child is working and bringing in their own income during the year, then the rules can establish that fact and deny the credit, but for a dependent child that doesn’t work during the last year or two in high school the parent gets NO child tax credit whatsoever. Doesn’t make sense to me. Sorry just a gripe, but the calculator seems to be right on for me with those facts otherwise. Checked the Kiplinger one and said the same thing.
March 31st, 2008 at 7:38 am
Brian,
“Child” for tax credit is not the same as for dependant for deduction. Under certain conditions, your child can be your dependant for life. The qualifications for dependants are much more permanent in terms of tax law history; the credit is subject to congressional whim and therefore no attempt is made by congress to equalize the two.
My question is this: I have pension income and capital gain income only. Due to donations and 3 child tax credits, we pay no income tax. Would I still receive the child related rebates if I pay no income taxes? Should I restructure some income to 2009?
April 2nd, 2008 at 10:05 am
My baby was born on 03/23/08, is she entitle to stimulus rebate?
April 3rd, 2008 at 8:19 am
I’m confused about one thing. PLEASE HELP!!!
My husband and I were able to claim one child each from previous marriages. His child lives with the mother (no child tax credit but claimed as dependent) my child, I share true 50/50 custody with the father (no tax credit but claimed as dependent). Will we get anything for the children since they were claimed as dependents even though we couldn’t claim the child tax credit?
I talked to H&R block, who did our taxes, and they said they base it on dependents claimed but everything I’m finding also mentions something about the child tax credit playing a factor. Anybody know?
April 12th, 2008 at 11:29 pm
I sold my artwork last year at the town library for the month of April 2007, and received a 1099 from them (the library handled all the sales and kept 10% of the proceeds). The amount (in box 7) on the 1099 is just under $3000. I also sold another couple of paintings totaling $600. So my “gross profit” was $3600. Does that mean I qualify for any sort of stimulus rebate? I don’t operate as a standard “business”, so I’m not sure what to do. Is my “qualifying income” calculated after I deduct expenses? I’m lost. And broke. I live with a friend who has generously not required me to pay room and board.
April 12th, 2008 at 11:31 pm
Forgot - I did not earn any income or file taxes in 2006
April 16th, 2008 at 12:59 pm
My baby was born in January 2008. Will I get a rebate for him as well?
April 28th, 2008 at 10:59 am
Please help me figure this out. We do not qualify for the stimulus based on 2007 taxes because we cashed in a large nest egg in order to move into a (small!) house in a decent neighborhood. The capital gains put our gross income over $200,000 - hence the rebate shrinks to zero.
But in 2008, with all of our savings sunk into our house, we will be back down to $120,000.
If this is a “pre-bate” for 2008, will we get anything ever? (We sure could use it, trying to pay for housing in California…)
April 28th, 2008 at 2:00 pm
Why does the government treat citizens so unequally? I’m not getting a rebate, even though I am your prime spending demographic. I make a nice living, yes, but it’s not THAT nice, and I pay a bunch of taxes every year. And yet, I’m punished for my success, despite the fact that friggin’ Hurricane Katrina knocked me on my rear financially, and every cent I earn is going toward my recovery, which I am far from achieving. So, enjoy your rebates. I’m going to grump in the corner and resent the government’s unfair populist policies. GRRRRRRRR!!!!! (Please know, that I don’t begrudge anyone getting the rebate, but I think I should get one too, and there should be absolutely no income restriction. It’s so un-equal, un-American, and unfair). Definite sour grapes over here.
April 30th, 2008 at 10:51 am
I am a single mom with one 17 year old and I filed Head of Household. I grossed $25,600 in 2007. It looked like I was suppose to get $900, but it was deposited into my checking account yesterday, and it was $600. Other parents in my same situation are saying the same thing. Anyone know why we got $300 less than expected?
May 1st, 2008 at 6:38 am
[...] Of course, knowing when you will receive your rebate is only half the equation. You probably also want to know how much money to expect. Well, fortunately, there is a nifty little calculator you can use to determine the exact amount of your rebate. Here’s how to Calculate Your Economic Stimulus Tax Rebate. [...]
May 2nd, 2008 at 7:50 am
Hello, can anyone give some advise….My husband and I filed jointly. But I always have to file injured spouse. Because of back childsupport… So We claimed 3 children 2 are ours and 1 is his…does this mean they will take a portion for his back childsupport,(he pays faithfully everyweek from his paycheck for years and years now) (like they do for our taxes) and I will get my portion or is that not an issue since its a rebate check….I think that is they were doing such wonderful things by giving us this rebate check to help with bills oil food etc…they shouldnt take it weither someone owes for anything. But if someone could give me some advise that would be great..
May 2nd, 2008 at 8:00 pm
If i was claimed but still made over $3,000 and filed taxes do i still get the check?
May 5th, 2008 at 3:25 pm
I am using my check to rent a car and visit my ailing Grandparents in Ohio. I am a single mom with no debt and three months emergency money in the bank. I have been wanting to visit my grandparents for five years, but could not afford a vacation. So I am happy and I guess I am stimulating the economy by renting a car (my old clunker will not make the trip) and buying gas.
June 7th, 2008 at 2:35 pm
My husband has 50/50 custody of his child with his ex-wife. They take turns claiming their daughter on their taxes each year. In 2007, the ex-wife claimed the daughter. Does that mean she will get the $300? Shouldn’t it be split 50/50?
July 6th, 2008 at 8:49 pm
The calculator said that I was suppose to get back 1500 and I only got back 900, I have checked with other fellow workers that I work with that make about the same thing that I do with 1 child, what happened to my check. I haven’t cashed it yet, what should I do?
August 17th, 2008 at 12:42 pm
I heard that there will be another check in november of 08 anyone else heard this?
February 17th, 2009 at 3:55 pm
How much will get back made $31,000 and claim one depent of the age 17 years, how much will i be getting back?
March 20th, 2009 at 3:33 pm
i have had a baby since i filed my taxes do i get an extra 300 with my stimulus? and is there someone i need to update?