IRS explains myths and facts about economic stimulus rebate payments

Amidst ongoing confusion about the impending tax rebate payments, the IRS has provided this list of myths vs. facts to help clear up questions and protect taxpayers from becoming victims of scams:

MYTH – The Stimulus Payment will reduce a taxpayer's 2008 refund.
FACT – The payment will NOT reduce refunds or increase the amount owed when a 2008 return is filed.

MYTH – The Stimulus Payment is taxable.
FACT – It is NOT taxable, but taxpayers are encouraged to keep a copy of the IRS notice they will receive later this year listing the amount of payment. In the event a taxpayer does not qualify to receive the full amount this year but does next year, the notice will be a record of the previous amount received.

MYTH – Taxpayers needn't do anything in order to receive a Stimulus Payment.
FACT – Taxpayers must file a 2007 tax return in order to be eligible for a payment. After filing a 2007 return, however, the taxpayer is set and the IRS will do the rest.

MYTH – Everybody is eligible for a check.
FACT – At the minimum, a taxpayer must have at least $3,000 of qualifying income to receive either $300 (Single) or $600 (Married Filing Jointly). Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans' benefits and earned income, such as income from wages, salaries, tips, and self-employment. For taxpayers filing joint tax returns, only a total of $3,000 of qualifying income from both spouses is required to be eligible. Also, for those who don't normally file, a tax return (Form 1040A) will be needed this year to get a check.

MYTH – Only paper checks will be issued.
FACT – Direct Deposit is the best way to receive the payment. Eligible taxpayers who choose direct deposit for their 2007 tax year refund will receive their Stimulus Payment the same way.

MYTH – The IRS will contact taxpayers either by phone or e-mail about their payments.
FACT – Watch for scams! IRS will not contact taxpayers by phone or e-mail about Stimulus Payments or refunds.

Number of comments: 1

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Kathy Viars , 05 March 2008 @ 01:44 AM  Stimulus direct deposit I understand that if you requested a direct deposit that is how you will get your rebate check. The question I have is what is you did your refund though a RAL refund involving a different bank than your own, where will the money go? KathyV., tax preparer, Maryland