Misconception #1: Most people will get their stimulus money as a check this year.
In 2008 almost everyone got a rebate check. For 2009, Congress decided to deliver the stimulus in a different manner, as a tax credit called the Making Work Pay credit.
Most taxpayers are already receiving their money through reduced tax withholding from their paychecks. Single taxpayers should be getting about $45 in extra take home pay each month and married workers about $65.
However, there are exceptions:
- Social Security recipients. In addition to the reduced withholding, the new law provides a one-time payment of $250 to recipients of Social Security, Railroad Retirement and Veterans Administration benefits. The 55 million recipients should have received their money by check or direct deposit by the end of May.
- Retired government employees who don't receive Social Security. They won’t get the $250 payment, but can claim a $250 tax credit when they file their 2009 returns.
- Higher-income taxpayers. The Making Work Pay tax credit phases out as income rises between $75,000 and $95,000 on single returns and between $150,000 and $190,000 for couples who file joint returns. Because they won’t get the credit, top wage earners don’t benefit from reduced withholding either.