- 2008 Tax Returns: Entering Info on Recovery Rebate
2008 Tax Returns: Entering Info on Recovery Rebate
IRS reports taxpayer confusion, errors involving rebates
When preparing your 2008 tax return, you will be asked to report the exact amount of the tax rebate, if any, that you received in 2008.
The IRS says that many 2008 filers have entered the wrong amount. This error could cause the IRS to reject your return or delay your refund.
The tax rebates, also known as stimulus payments, were given to most taxpayers who filed a 2007 tax return in 2008, as part of the government's plan to stimulate the economy.
So why does the IRS need me to report the rebate amount I got in 2008?
Some people who did not get a rebate in the first part of 2008, or got less than the full amount, could qualify for a payment when filing their 2008 tax returns. These payments are known as "recovery rebate credits."
The IRS requires you to enter the rebate amount you received last year, when you prepare your 2008 tax return -- to determine if you qualify for a recovery rebate.
You'll need to know your rebate amount no matter how you file your tax return, whether you use tax preparation software like TurboTax, or paper and pencil.
How to verify the amount of your 2008 tax rebate
Even if you think you remember the amount you received, don't guess. You need to be sure the figure you enter matches the amount in IRS records.
You have three ways to verify the amount:
- Go to a secure IRS Web site by clicking on How Much Was My 2008 Stimulus Payment? Follow the instructions, and you should get an answer within seconds.
- Call the IRS directly at 1-866-234-2942. Be ready to provide your Social Security number, your 2007 filing status and the number of exemptions you claimed.
- Find the figure on the notice the IRS mailed you last year, Notice 1378.
If you already filed your return with TurboTax and got a rejection notice related to "recovery rebate credit," please follow the instructions to re-enter your 2008 stimulus payment in the program. Read this help article for more information. The article also explains what to do if you got a rebate in 2008, but some or all of it was redirected by the IRS to repay your outstanding debt for back taxes, child support or student loans.
Other IRS rebate reminders
Because of confusion surrounding the recovery rebate credit , the IRS offers these reminders:
- The rebates, or economic stimulus payments, are NOT taxable and shouldn't be reported as income on your 2008 return.
- Some people are mistaking the tax refund they got for tax year 2007 with the tax rebate, or stimulus payment, they received separately in 2008. Do not enter the amount of your regular tax refund when asked for the amount of the tax rebate you received.
Who qualifies for a "recovery rebate credit"?
You could qualify if you:
- Filed a 2007 tax return, but didn't qualify for a rebate, or qualified for less than the full amount.
- Had a financial or other life change in 2008 that would make you eligible for a recovery rebate, or a larger rebate.
However, the IRS says that most taxpayers who got a stimulus payment last year will not qualify for the recovery rebate on their 2008 federal income tax returns.
What kind of changes could make me eligible for a recovery rebate credit?
You would be eligible if:
- Your income sharply increased, or decreased, in 2008 from 2007.
- You had a baby or adopted a child.
- You were claimed as a dependent on another person's return in 2007, but could not be claimed as a dependent in 2008.
- You did not file a 2007 tax return.
How much are the rebates worth?
Many people who got a rebate in 2008 received the maximum of $600 each, or $1,200 if married and filing jointly, plus $300 each for every child age 16 or younger.
Some people with low incomes -- and some who receive Social Security and Veterans' pensions -- got a minimum of $300 per person or $600 per couple.
However, some people did not qualify because their incomes were either too high or too low. Others didn't because they did not have Social Security numbers as required.
For information about who qualifies, read Tax Rebate Plan.
When would I get a recovery rebate?
If you qualify, you would get the rebate once you file your 2008 income tax return.
The payment will NOT be in the form of a direct deposit or mailed check, as it was in 2008.
Instead, it will either increase your refund or reduce your federal income taxes owed, by the amount of the rebate. That is, dollar for dollar.
Will I have to repay last year's rebate based on what I report on my 2008 return?
No.
Even if you got a rebate based on your 2007 return – and your life circumstances during 2008 would make you ineligible for a rebate – you don’t have to give your “overpayment” back.
Sounds too good to be true. What's this about?
It’s a bit complicated, but in a nutshell:
The rebate, for most people, was actually an advanced credit on their 2008 income taxes. That credit does NOT need to be repaid or be subtracted from your 2008 tax refund when you file your 2008 return. It will also not be taxed later (although it will be reported on your 2009 tax return).
The government first gave the rebates out in early 2008, rather than in 2009, to help stimulate the economy. However, people who missed out or were considered ineligible in 2008 can qualify in 2009.
Below are several examples of people who could get a recovery rebate.
I didn't qualify for a rebate because my 2007 income was too high. But I was laid off in March 2008.
If your 2008 income dropped below the cutoffs -- rebates are reduced starting at $75,000 of adjusted gross income, or AGI, for single persons and $150,000 AGI for married couples -- you would likely qualify. A payment is decreased by 5 percent of AGI income over the limit. (However, qualifying children could increase that cutoff amount.)
Your AGI is your total income minus certain adjustments, like IRA contributions.
For more about higher-income earners and the recovery rebate, please read Tax Rebate Plan.
In 2007 I was a college student and my parents claimed me as a dependent. In 2008 I had a full-time job and am no longer a dependent.
You would qualify if you meet all the requirements and file a 2008 tax return.
My husband and I had a baby in 2008. Would we get the $300 child rebate?
Yes, assuming you would otherwise qualify.
How do I know if I will get a recovery rebate?
TurboTax will do the calculations for you and let you know. But first, you must accurately enter the amount, if any, of the stimulus payment you received in 2008.
