Tax payers can expect to receive rebates starting in May, after President George W. Bush today signed into law a bill authorizing payments from $300 to $1,200 to more than 130 million people.
The rebates are part of $168 billion plan approved by lawmakers this month to give a booster shot to the slowing U.S. economy. The stimulus package also includes tax breaks for businesses when they invest in new plants and equipment.
If you are eligible for a payment, all you have to do is file a 2007 tax return and the IRS will do the rest, said Acting IRS Commissioner Linda Stiff.
To qualify, individual recipients must file their 2007 income tax returns by April 15. Most people who earn above $3,000 will qualify, including those who receive the amount through Social Security or veterans' disability benefits.
Individual filers who earn more than $75,000 will receive smaller checks. Couples making more than $150,000 will also receive less. The earning limit to receive a check for singles and couples is $87,000, and $174,000 respectively.
Those earning less than $3,000 per year will receive $300 if single, or $600 if a couple. Those who usually don't need to file income taxes because they don't earn enough, such as low-income seniors, must file to qualify.
Some people receiving Social Security and veterans' benefits may not realize they will need to file a tax return to get the stimulus payment, Stiff said. To reach these people, the IRS and Treasury will work closely with the Department of Veterans Affairs, the Social Security Administration and key beneficiary groups on outreach efforts.
Filers must have a valid Social Security number.
The Internal Revenue Service will mail checks or deposit funds directly into bank accounts depending on what is requested.
Individuals who can be claimed as dependents on someone else's tax return are ineligible. The IRS is also warning taxpayers to beware of tax rebate scams such as telephone calls or e-mails claiming to be from the IRS or asking for financial information.