To receive this year's economic stimulus payment -- commonly referred to as a rebate -- most taxpayers need to do nothing more than file their 2007 tax return as they normally would, according to a news release from the IRS.
However, some people aren't normally required to file a tax return because their income is below the filing requirement.Some low-income workers, Social Security beneficiaries, veterans and railroad retirees might be eligible to receive a $300 to $600 economic stimulus payment, plus an additional $300 for each qualifying child. But they need to take action by filing a simple 2007 federal income tax return showing at least $3,000 in qualifying income. Startingthis week, they can do so electronically, and free, using Free File at IRS.gov.
Individuals who normally do not file a tax return but must do so this year to receive their 2008 stimulus payment can now use the IRS Free File program. People in this category should go to IRS.gov, click on Free File, and then be sure to use only those companies listed under Free File -- Economic Stimulus Payment.
(Taxpayers who normally file a tax return and want to use Free File should simply go to the main Free File page and click 'Start Now' to see a list of the 19 companies offering free preparation and electronic filing to the IRS. Free File is available to 97 million taxpayers who earn $54,000 or less.)
"For those who are only filing to receive an economic stimulus payment, Free File is easy and, of course, free. Just follow the simple instructions provided by the software to file your return and then the IRS will do the rest," said Carrie Resch, IRS spokeswoman.
How to determine qualifying income
Filers must have at least $3,000 in 2007 income from any combination of the four types of qualifying income. Joint filers can add both spouses' qualifying incomes to reach the $3,000 requirement. The four types of qualifying income are:
-- Earned income (including wages, salaries, tips and other employee compensation, as well as net earnings from self-employment). Earned income also includes non-taxable combat zone pay, if the recipient of that pay elects to include it as earned income.
*Social Security retirement, disability and survivor's benefits reported in Box 5 of Form SSA-1099. (Note: Supplemental Security Income (SSI) is not qualifying income and is also not included in the amount reported in Box 5 of Form SSA-1099.)
-- Railroad Retirement Tier I benefits reported in Box 5 of Form RRB-1099. (Note: None of the benefits reported on Form RRB-1099-R are considered qualifying income.)
-- Veterans retirement, disability and survivor's benefits paid by the Department of Veterans Affairs.
Filers who do not know the exact amount of these benefits may estimate the amount received by multiplying their monthly benefit (prior to any deductions for withheld taxes or Medicare premiums) by the number of months during 2007 that they received the benefit.
Filling out the form
The IRS encourages filers with internet access to use the easy Free Fileoptions at IRS.gov.
Need to file a paper return to report qualifying income? Use a 2007 Form 1040A following the instructions below. This simplified 1040A reports only the total amount qualifying income and identifying information, so the IRS can issue the stimulus payment.
The fastest way to get a 1040A is at IRS.gov, but filers can also check some post offices or libraries, the agency's taxpayer assistance centers, or order it from 1-800-TAX-FORM. A sample of Form 1040A at IRS.gov shows the only areas that need to be completed.
Following are special instructions to complete the simple-version tax return:
-- Write the words "Stimulus Payment" across the top.
-- Write the total amount of earned income for 2007 on Line 7 of the form.
-- Total the other three types of qualifying income, if any, and enter the total on line 14a, if using Form 1040A, or line 20a, if using Form 1040.
-- Enter the name, address and Social Security Number. Ifit's a joint return, both spouses must include their names and Social Security Numbers.
-- Check the appropriate filing status.
-- If the filer has qualifying children (they must qualify for the child tax credit and be under the age of 17 as of Dec. 31, 2007) write their names and Social Security Numbers under "Dependents" in the "Exemptions" section. Include the dependent's relationship to the taxpayer and check the "qualifying child" box.
-- To allow the IRS to depositthe economic stimulus payment intoa financial account, such as checking or savings accounts, enter the direct deposit information in the "Refund" section on the back of the tax return.
-- Sign and date the tax return in the "Sign here" section. If filing jointly with a spouse, both must sign and date the form.
-- From Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin or Wyoming, mail the completed form to Department of the Treasury, Internal Revenue Service Center, Fresno, Calif., 93888-0099.
For more information and help
Taxpayers who need help in preparing this simple-version tax form may visit one of the more than 12,000 volunteer free tax help locations across the country. To find the nearest volunteer free tax help location call the 211 or 311 local assistance number, if available, or call the IRS toll-free number 1-800-906-9887.
Reminder: Don't wait and beware of scams
Economic stimulus payments will be issued beginning in early May and will continue through the rest of the year. Those who file a 2007 tax return by April 15 and choose direct deposit will likely be among the first group of people to receive their economic stimulus payments. The longer one waits to file after April 15, the longer it will take to receive the economic stimulus payment.
The IRS will send informational notices about the stimulus payments through regular mail. One already was issued and will be reaching mailboxes throughout March. The agency will not call or email people about these payments. Scams have surfaced in which IRS imposters try to get financial information from people, using the stimulus payments as a lure. Don't fall victim to these scams. The only thing a taxpayer needs to do to receive the stimulus payment is file a 2007 tax return.
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