By Staff
The Internal Revenue Service is setting the record straight on several issues surrounding the 2008 Economic Stimulus Payments. An estimated 130 million taxpayers will receive the payments beginning in May. “The most complete information about the payments is at IRS.gov,” said IRS spokesman Dan Boone. “But the IRS is concerned that some rumors are causing confusion.”
The following is a list of reported myths and the facts about the payments:
MYTH – The Stimulus Payment will reduce a taxpayer’s 2008 refund. FACT – The payment will not reduce refunds or increase the amount owed when a 2008 return is filed.
MYTH – The Stimulus Payment is taxable. FACT – It is not subject to federal taxes, but taxpayers are encouraged to keep a copy of the IRS notice they will receive later this year showing the amount of payment. In the event a taxpayer does not qualify to receive the full amount this year but does next year, the notice will serve as a record of the previous amount received.
MYTH – Taxpayers needn’t do anything in order to receive a Stimulus Payment. FACT – Taxpayers must file a 2007 tax return in order to be eligible for a payment. The IRS will do the rest.
MYTH – Everybody is eligible for a payment. FACT – Not everyone qualifies, but most of those who do will receive a minimum of $300. Individuals or married couples who have no 2007 tax liability must file a tax return reporting at least $3,000 of “qualifying income,” which includes most Social Security benefits, certain Railroad Retirement and veterans’ benefits, and earned income. Filers whose 2007 adjusted gross income exceeds $75,000 ($150,000 for married couples filing jointly) will receive a reduced payment or no payment at all.
MYTH – A person can file with any taxpayer ID number and get a Stimulus Payment. FACT – All taxpayers (both spouses on a joint return) must have a valid Social Security Number (SSN) in order to be eligible. Children must have valid SSNs to qualify a filer for an additional amount.
MYTH – Only paper checks will be issued. FACT – Direct Deposit is the best way to receive the payment. Most filers who choose Direct Deposit for their 2007 tax refund will also have their Stimulus Payment direct deposited. Filers who choose a refund anticipation loan or who choose the split refund option will get paper stimulus checks.
MYTH – The IRS will contact taxpayers by phone or e-mail about their Stimulus Payments. FACT – Watch out for scams! IRS will contact taxpayers about Stimulus Payments only via the U. S. Mail.
The IRS reminds those who don’t have any other requirement to file a tax return that submitting a tax return to qualify for the Economic Stimulus Payments does not create any additional tax or trigger a tax bill. In addition, the Stimulus Payments will not have any effect on eligibility for federal benefits.