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REBATE DEBATE

February 01, 2008

As the remaining presidential candidates prepare for "Super Tuesday," a hungry nation yearns to know: "Will I get a rebate? And how much?"

If you pay income taxes and make under $75,000, or $150,000 on a joint return, you'll probably get something. Everyone else, maybe.

HOUSE VERSION

The plan passed by the House Ways and Means Committee earlier this week computes rebates this way:

The IRS will look at your 2007 return. If you incurred at least $600 in tax, or $1,200 on a joint return, the IRS will mail you a $600 ($1,200 joint) check.

If your tax was less than that, the IRS will send you the lesser amount.

You'll also get a $300 check for each child for whom you received a 2007 credit.

The rebate will be reduced by 5 cents for each dollar your adjusted gross income exceeds $75,000, or $150,000 for joint returns.

For folks without at least $300 of 2007 income tax liability, the rebate works this way:

IF:

-you had at least $3000 of earned income (wages or self-employment), OR

- at least $1 of tax liability and gross income of at least $8,750 (or $17,500 joint),

you will get a $300 check, or $600 for a joint return. You also will get $300 per dependent.

When you do your 2008 return, you will recompute the credit using 2008 numbers. If you compute a higher credit, you get the difference when you file your return. If the credit is lower using 2008 numbers, you won't have to pay it back.

SENATE VERSION

The bill passed by the Senate Finance Committee Wednesday works the same way as the Ways and Means Bill for people who pay income tax, except the rebate is smaller ($500 single, $1,000 joint), and the phase-out starts at $150,000 AGI, or $300,000 joint.

The Senate bill's big differences are for people who don't pay income tax. Where the House bill gives a reduced credit for non-income taxpayers with at least $3,000 of earned income, the Senate gives the full credit, and extends it to people with at least $3,000 in social security benefits or veteran's penstions.

Oh, and the Senate bill doesn't apply to Congresscritters, so they are only bribing the rest of us with our own money.

Links:

Ways and Means Explanation
Ways and Means Text

Senate Finance Explanation
Senate Finance Text

Tags: stimulus.

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