Kingsport Times News Friday, October 24, 2014

Local News

IRS official dispels rumors on economic stimulus refunds

February 23rd, 2008 12:00 am by Rick Wagner



Misinformation abounds about this year’s economic stimulus package, including false stories that the payments will reduce next year’s tax refunds.


The Internal Revenue Service’s top official Friday tried to set the record straight, but even she said some questions don’t quite have full answers yet.


Linda Stiff, acting IRS commissioner, spoke with reporters from across the nation in a conference call from Washington, D.C., Friday.


Stiff said unlike the 2001 stimulus, the payments going out this year will not count against 2008 tax refunds or increase 2008 tax liability.


“It is not taxable income next year,” Stiff said.


However, she said the biggest change and challenge likely will be that people who don’t normally file taxes and haven’t filed them for years must file — or they won’t receive the stimulus payments.


“This year, all taxpayers have to file a 2007 tax return to receive the economic stimulus package,” Stiff told reporters.


She said the reason for required filings was that interfacing the IRS computer system with Social Security and others would significantly delay the payments.


That means a group of 20 million to 25 million Social Security recipients, low-income people, those with veterans benefits including veterans disability, and those on railroad retirements must file an abbreviated return proving they had at least $3,000 in qualifying income.


She said those filers are asked to write “stimulus” across the top of their return, although those who have already filed and did not still should receive a refund.


Asked about the availability of free online filing for that group, she said the IRS is trying to set up something to be unveiled in the next few weeks.


In addition, she said the IRS is setting up help sites nationwide and working with AARP and other groups to provide income tax assistance.


In addition, special mailings are going out to Social Security, veterans and railroad benefits recipients. Stiff said those people, who normally don’t file, will have until sometime in the late summer or early fall to file and still get a stimulus payment in 2007.


The widely reported basics are simple: Taxpayers who make at least $3,000 a year in earned and other selected income are eligible.


Those who make up to $75,000 a year can get $600, while couples making up to $150,000 can get $1,200. The amounts are phased out at 5 percent per $1,000 of income beyond those levels.


In addition, taxpayers can receive $300 for each dependent child 17 or younger as of Dec. 31, 2007.


However, since the tax stimulus package is for 2008, those who have children in 2008 will be able to file for the $300-per-child payments on their 2008 returns filed in 2009.


Stiff said children who are no longer eligible to be dependents because of income in 2007 would be eligible to become dependents in 2008 returns and their parents receive the stimulus package.


However, that’s only for those 17 or younger Dec. 31, 2007.


Also, those who didn’t make enough for the full $600 or $1,200 in 2007 can file for more, up to the maximum, on 2008 returns filed in 2009.


Notices will go out to about 135 million Americans in March notifying them of a pending stimulus payment. Then another notice will come when the stimulus payment is mailed by check or comes online.


Dependents older than 17 on Dec. 31, 2007, are not eligible to file for the $300 payments to parents, even if they are still dependents. However, those who make $3,000 or more might be able to file for the individual refunds, Stiff said.


Other questions centered around the timing of the payments. Stiff said the exact system and timetable has not been worked out, but that it likely will be based on Social Security numbers and geography, not on the order tax returns were filled or alphabetically.


The first direct deposits should go out around May 2, with checks to follow a week later.


Stiff recommended all taxpayers use electronic filing, which will make regular tax refunds and the stimulus payments arrive much quicker.


Other caveats are that Supplemental Security Income (SSI) and workers compensation do not count toward the $3,000 minimum income level. However, Social Security, Social Security disability and Social Security survivor benefits do count.


Stiff repeatedly urged those with questions to go to the IRS Web site: www.irs.gov.


She said sample forms are available there for those who don’t normally file, and frequently asked questions are answered there.



comments powered by Disqus