Skip to content. | Skip to navigation

You are here: Home / Salary / Income Tax / RECOVERY REBATE CREDIT
 

RECOVERY REBATE CREDIT

Who is eligible for the Recovery Rebate Credit? What is it? And how much is the Payment? What do I have to do to get the Payment? When and how do I receive the Rebate? Paywizard.org gives you the answers on all your questions about the Recovery Rebate Credit.

>DON'T FORGET TO TAKE OUR SALARY SURVEY!!

Go to 2008 Individual Income Tax Rates, Deductions and Exemptions

>What is the Recovery Rebate Credit?
>How much is the Recovery Rebate Credit?
>Who is eligible?

>Who is not eligible?
>Will the rebate affect my 2008 tax refund?
>I received a rebate check last year, but my income exceeded the limits to qualify, will I have to give the money back?
>What do I have to do to get the Payment?
>
Where do I fill out the rebate information on my tax return?
>The worksheet asks me for the exact amount of the rebate I received last year. Where can I find that information?

>
What will the amount of my rebate be?
>What if I need further help to fill out my tax return 2007?
>When and how do I receive the Payment?
>>Scroll down for the answers

What is it?
It is an one-time benefit for people who didn't receive the full economic stimulus payment in 2008 and whose circumstances may have changed, making them eligible now for some or all of the unpaid portion.

The credit is calculated using the same criteria as the stimulus rebate. The difference is the recovery rebate uses 2008 income information. That means a change in your income or dependents might make you eligible for a higher rebate amount.

Scroll down to see who is eligible.

How much is the Payment?

In most cases, payments will range up to $600 for individuals and $1200 for joint filers. Taxpayers may receive $300 for each qualifying child under the age of 17 in 2007.

Payment could be less, depending on tax liability and Adjusted Gross Income (AGI). Phaseout reduction begins at $75,000 for single and $150,000 for joint filers. Your rebate is reduced by 5 cents for every $1 you make over those thresholds.

Who is eligible?

  • If you didn't file for an economic stimulus payment in 2008 because you weren't sure you were eligible, you may be able to file for a payment in 2009:
  • if you or your family have at least $3,000 in qualifying income.
    Income for this purpose includes
    (click on the links for more information):

  • Families who gained an additional qualifying child in 2008.
  • if you or your family didn't have valid Social Security Numbers (SSN) in 2007, but received them in 2008 - you must have a valid SSN to qualify for the payment; if you file jointly and your spouse has an invalid SSN, neither can receive the payment. If you file for qualified children, the children must also have a valid SSN to receive payment.
  • You are not a dependent or eligible to be a dependent on someone else’s federal tax return. (The same must be true of any family members claimed on your return.)


Who is not eligible?

  • If you received the full rebate last year.
  • If you didn't file a 2007 and don't file a 2008 tax return.
  • If your net income tax liability is zero and your qualifying income is less than $3,000. See in the question above what income is for this purpose.
  • if you can be claimed as a dependent on someone else's tax return.
  • Kids above 17 years of age before Dec. 31 2008.
  • If your AGI is more than $87,000 for a single filer and more than $174,000 for married joint filers.
  • If you or your qualified children under 17 haven't got a valid Social Security Number.
  • If you are a nonresident alien.

Will the rebate affect my tax refund?
There will be no effect to tax returns, the recovery rebate credit is a tax free credit payment against your income. The stimulus payment will not reduce your refund or increase the amount you owe when you file your 2008 return.

I received a rebate check last year, but my income exceeds the limits to qualify now. Will I have to give the money back?
No. You get a second chance to qualify if your income has dropped, you don’t have to give back any money if your income has risen.

What do I have to do to get the Payment?
If you are eligible (see above) you have to claim the recovery rebate credit on Form 1040, 1040A or 1040EZ. The instructions for these forms will show you which lines to use. If you're filing on paper, simply follow the line-by-line instructions to choose this option. (see for more information below)

Where do I fill out the rebate information on my tax return?
You don't actually report the amount of your rebate on Form 1040. That money is not taxable and shouldn’t be included as income when you file your taxes.

But you will have to use the Recovery Rebate Worksheet in Form 1040, starting on page 61, line 70, called the Recovery Rebate Credit Worksheet. Here you can calculate whether you should receive money or not. This math will be done automatically if you're use tax software. For most people the amount will be zero.

You can also ask the IRS to calculate your rebate recovery credit for you. On the dotted lines next to Form 1040 line 70 write in "RRC."

Be sure to use the amount of the rebate you already may have received in box 28 of the Recovery Rebate Worksheet, not your 2007 refund. The IRS reports that a lot of people have been mistakenly entering their refund amount.

The worksheet asks me for the exact amount of the rebate I received last year. Where can I find that information?
You should have received Notice 1378 last year, which the IRS mailed to people who received the rebate. You can also use the How Much Was My 2008 Stimulus Payment? tool at the IRS Web site or call the IRS at 866-234-2942. Select option one for the amount of your economic stimulus payment, then you'll need to provide your filing status, Social Security number and number of exemptions to verify your identity.


What will the amount of my rebate be?
The IRS has provided a Recovery Rebate Worksheet for calculating the payment on pages 61 and 62 of Form 1040. This math will be done automatically if you're use tax software.

The Recovery Rebate Credit Information Center and FAQs About the Recovery Rebate Credit can help you figure out whether you're likely to get additional money. The IRS also plans to have a Recovery Rebate Calculator available in late February.

You can also ask the IRS to calculate your rebate recovery credit for you. On the dotted lines next to Form 1040 line 70 write in "RRC."

 

What if I need further help to fill out my tax return 2008?
The Volunteer Income Tax Assistance (VITA) program provides help to low- and moderate-income taxpayers. Call 1-800-906-9887 to locate the nearest VITA site.

The Tax Counseling for the Elderly (TCE) Program provides free tax help to people age 60 and older. As part of the IRS-sponsored TCE Program, AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season. To find an AARP Tax Aide site call 1-888-227-7669 or visit the AARP Web site.

When do I receive the Payment?
Unlike the economic stimulus payment, the recovery rebate credit will be included in your tax refund for 2008 and will not be issued as a separate payment.

 

Sources:




>>DON"T FORGET TO TAKE OUR SALARY SURVEY!!

Share |