THE ECONOMIC STIMULUS PAYMENTS FAQ's

1. Who gets the rebates (stimulus payments)?
Only individuals. Business entities, estates, and trusts are not eligible.

2. Will all individuals get rebates?
No. Individuals do not get a rebate if:

- They don't have a valid Social Security Number. If filing a joint return, both husband and wife must have valid Social Security Numbers.
- If they are or can be claimed as someone else's dependent.
- If they are nonresident aliens or illegal immigrants.
- If they pay no tax and have less than $3,000 of qualifying income.

3. What does a person have to do to get the rebate?
Those who have filed or will be filing a federal tax return for Tax Year 2007 don't have to do anything further. The IRS will determine whether they qualify and automatically send any payment due.

Those who do NOT usually file a federal return AND have at least $3,000 in qualifying income must file a federal tax return in order to receive the payment.

4. What is qualifying income?

- Earned income (from a job).
- Net self-employment income.
- Social Security retirement income reported on Form 1099-SSA.
- Veteran's benefits, including disability compensation and pension or survivors? benefits received from the Dept. of Veteran's Affairs in 2007.
- Certain Railroad Retirement benefits.
- Nontaxable combat pay IF the taxpayer elects to include it as earned income.

5. What is NOT "qualifying income"?

- Supplemental Security Income (SSI).
- Non-veteran pensions and other types of retirement income (such as IRAs).
- Dividends, interest and capital gains income.

6. Can a person combine different types of qualifying income in order to meet the $3000 minimum?
Yes.

7. Do parents receive additional payments for children?
Yes. Parents and anyone else eligible for a stimulus payment will also receive an additional $300 for each qualifying child.

8. How does a child qualify?
The child must have a valid Social Security Number and be eligible under the Child Tax Credit rules which means that the child:

- must be UNDER the age of 17
- be the taxpayer's son, daughter, stepson, stepdaughter, brother, sister, stepbrother, stepsister, or descendant of any such individual
- must NOT have provided more than half of his or her own support.

9. How much is the rebate?
A single person with no children gets a minimum rebate of $300 and a maximum rebate of $600.
A married couple filing jointly with no children gets a minimum rebate of $600 and a maximum rebate of $1200.

To get the maximum rebate, the taxpayer's net tax liability for 2007 (figured as set forth below) must be $600 or more for a single person and $1,200 or more for a married couple filing jointly.

To get the minimum rebate, an individual must have qualifying income of at least $3,000 OR owe tax (figured as set forth below) of at least $1. If the amount of a person's net tax liability falls between the minimum and maximum amounts, the rebate will be equal to the person?s net tax liability.

10. What is "net tax liability"?
Net income tax liability is the amount shown on Form 1040, Line 57 (Taxes owed - all credits) PLUS the amount on Line 52 (Child Tax Credit).

For 1040A filers, it is the amount on Line 35 (Taxes Owed ? all credits) PLUS the amount on Line 32 (Child Tax Credit).

For Form 1040EZ filers, it is the amount on Line 10.

11. Are those with high income eligible for a stimulus payment?
Yes, but the amount of the rebate (both the basic and the child's amount) is reduced by 5% of a taxpayer's adjusted gross income above $75,000 ($150,000 for a joint return).

Example: a married couple filing jointly with no children has net tax liability of over $1200. This couple would normally be entitled to a rebate of $1200 but because their income exceeds the limit of $150,000, their rebate will be reduced by $500 (5% x ($160,000 - $150,000). Therefore, they will receive $700.

12. Will the stimulus payment affect a person's eligibility for other federal benefits such as temporary assistance for needy families (TANF), Food Stamps, or Social Security?
No.

13. When will the payments be received?
The Treasury Department will start sending out payments in early May. It will be a separate payment from any refund payment the taxpayer is entitled to receive.

14. Can the stimulus payment be direct deposited?
Yes. If the taxpayer selected direct deposit for any refund due on the 2007 tax return, the stimulus payment will be automatically deposited into the same bank account. If the taxpayer did not have a refund due, the taxpayer can select the direct deposit option when filing for the stimulus payment.

If a taxpayer chose direct deposit for a 2007 tax refund but also requested a refund anticipation loan (RAL), the stimulus payment will NOT be direct deposited and the taxpayer will receive a paper check.

15. What happens if the taxpayer owes federal income tax?
The stimulus payment is treated like any other tax refund in this case and can be used to pay past due federal or state income taxes or non-tax federal debt such as student loans and child support. If this happens, the taxpayer will receive a letter explaining how the stimulus payment was applied.

16. Is the stimulus payment taxable next year?
No. But anyone receiving a stimulus payment should make sure to keep their records and any notices received from the IRS because they will need this information when preparing their 2008 return.