They're back. The rebate checks that were mailed last summer, and which caused great confusion then, are once again tripping up taxpayers. According to a report last week from the IRS, 15% of filings so far this year incorrectly claim the stimulus rebate, referred to as the Recovery Rebate Credit. Didn't realize the stimulus would be on returns? Let's clarify.
Unbeknownst to just about everyone, last year's rebate checks were an advance credit on 2008 returns. But to mail the cash, the IRS used data from 2007. So if you didn't qualify for the full rebate but your tax situation changed from year to year--say, you lost a job or had a baby--you may qualify now. As a refresher: You're eligible for $600 if you are a single filer and earn $75,000 or less. Couples with incomes of $150,000 or less receive $1,200. In both cases, you get an additional $300 for each dependent child you claim on your return. If your income exceeds those caps, the rebate is gradually phased out.
The problem today is remembering how much you received (if anything) last summer, and whether you can now claim more. So here are three tactics:
1. Dig up Notice 1378, which was mailed along with your stimulus check and lists the rebate amount.
2. Go to the IRS website and look up your rebate. You'll need to provide your Social Security number, your 2007 filing status and the number of exemptions you claimed on your 2007 return.
3. Call the IRS (866-234-2942). You'll need to provide the same information that the IRS website requires.
Once you know how much stimulus you received last summer, you can calculate whether you're eligible for the Recovery Rebate Credit. My advice: Get a good accountant or tax software program to run the numbers for you.
-- Carolyn Bigda