|
Congress passed the Economic Stimulus Act on February 19, 2008 in an attempt to head of economic stagnation. The measure provides for checks to be sent by mid-2008 to all qualifying individuals who file a 2007 tax return. The amount of the rebate, which ranges from $300 to $1,800, will be dependent on information about family size and earned income provided in the individual's 2007 tax return. The rebate is a refund from the temporary elimination of the ten percent tax bracket.
Unmarried individuals will receive a tax rebate of $600 and married couples will receive $1,200. In addition to this, there will be a $300 tax rebate for each qualifying child, with a maximum of two children, which results in a maximum tax rebate of $1,800 for a married couple with two children. Eligible children include children under the age of 17 who can be claimed as dependents. Everyone who earns at least $3,000 and no more than $75,000 annually will be eligible for the full tax rebate. The tax rebate will be reduced by five percent of income over $75,000 for those filing individually and by five percent of income over $150,000 for those filing jointly.
Those ineligible for the rebate include anyone earning less than $3,000 annually, anyone who can be claimed as a dependent, or taxpayers who file Form 1040-NR, 1040-PR or 1040-SS. This means that most students will not be able to receive rebates, either because they do not earn at least $3,000 annually or because their parents claim them on their tax returns. In order to claim someone as your dependent, the following requirements must be met:
- The person must be your child, step-child, adopted child, brother, sister, or a descendent of one of these relations
- The person must be under the age of 19 by the end of the year; or under the age of 24 by the end of the year and be a full-time student for at least five months out of the year; or any age and permanently and completely disabled
- The person did not provide more than half of his or her own support for the year
- The person must reside with you for more than half the year
No additional forms are necessary for receiving the tax rebate. Eligible
individuals need only to complete their 2007 tax returns and the IRS will calculate the tax rebates and mail them later in the year. The IRS plans on mailing two informational notices to advise tax payers about the stimulus package.
Lisa DeVillez notes that "the stimulus plan is a good idea but I won't get anything because I didn't make enough money." The stimulus plan even quietly ignores the millions of working high school and college students who do make enough money to meet the $3000 requirement by requiring that, in order to receive the rebate, the tax payer cannot be able to be claimed by anyone else. The majority of students under the age of twenty-four can be claimed by their parents, which then makes them ineligible for the rebate. Interestingly enough, the rebate also specifies that the $300 rebate given to families per each child is only eligible to children under the age of seventeen. So the young adults between the ages of seventeen and twenty-three do not "exist" as far as this rebate is concerned.
Sources:
http://www.komotv.com/news/local/15790202.html
http://taxes.about.com/od/2008taxes/p/stimulus_rebate.htm
http://taxes.about.com/od/dependents/a/Dependents_2.htm
|
