You may recall that at the outset of the financial crisis, a time that now seems relatively calm, Congress provided for an Economic Stimulus Payment. Many married couples and single individuals received $1,200 and $600, respectively, as a result of this program. Although there has been talk for months about a second stimulus payment nothing yet has passed.
However, recovery rebate credits are already in place.
You: What are those?
The Recovery Rebate Credit exists to allow those who didn’t qualify to receive the maximum Economic Stimulus Payment in 2008 a second shot at the federal government’s coffers in 2009.
Frequently Asked Questions about the Recovery Rebate Credit (RRC)
You: Who gets the RRC?
Basically, only people who fall into one or more of the following categories are eligible for the RRC:
- Your income dropped from 2007 to 2008 so that you now qualify for a larger payment
- You had more eligible children at the end of 2008 than you did at the end of 2007
- You could have been claimed as a dependent in 2007 but could not for 2008
You: How do I get the money?
Unlike last year’s economic stimulus payment, the RRC will not be paid via a separate check. Instead, the amount of the RRC will increase your 2008 income tax refund (or decrease the amount you owe). You simply enter the amount on line 70 of Form 1040, should you qualify.
You: How much will I get?
A calculator is being created by the IRS to help with this calculation and will be available in February, 2009.
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Anyone else out there expecting a payment – why? Birth/adoption of a child or is there a silver lining in a lower income year?
Is anybody still waiting to receive their stimulus payment from last year? What’s the latest “they’ve” told you?