While there appears to be a lot of add-ons taking place on the current bill it appears that most taxpayers can expect to see a rebate of up to $600. This equates to $1,200 for couples, and even more for most families with children. Since the country is already trillions of dollars in debt and creditors are finding it more difficult to secure loans for borrowers this must mean that the Treasury has plans to print up some money. Sadly, once they do this the value of the current dollar is sure to decline, making it even harder for the lower income and fixed income citizens to make ends meet.
However, one must note that since this windfall also depends on smooth sailing at the IRS, an agency already overrun with forms and expected refunds we may find ourselves already in quite a pickle before anyone even sees a single rebate. Despite this, however, the Treasury believes that the IRS will be in a position to start mailing off the expected rebates within 60 days of President Bush signing the measure into law. They think that the entire process should be able to be accomplished in as little as 10 weeks if not sooner.
But do you qualify? “Almost everyone who earns some income will benefit according to Douglas W. Elmendorf, an analyst at the Brookings Institution. He believes that the idea behind the economic stimulus package is to get the money into the hands of those most likely to spend it. That means that even low income parties should benefit. This should be a critical part of the package since these are the individuals who would be most directly hurt by the downturn in the economy. By lower income we are talking about individuals who do not make enough to pay taxes but had at least $3,000 in earned income. If the current measure makes its way to the president’s desk that would mean that these individuals would get $300. Those earning less than that would be disqualified as would the wealthiest Americans. Older people living solely on Social Security would not get the rebate unless one of the add-ons changes the criteria.
Individuals with adjusted gross incomes of more than $75,000 and couples with incomes exceeding $150,000 would get smaller rebates based on a declining scale determined on the amount of money they made above the ceiling cap. Contributions towards IRA’s, retirement accounts and health saving accounts would not count towards the limits.
It appears that ¾ of those eligible to receive the rebates will be working people. Another ¼ would qualify solely through pension or interest income. These individuals and the unemployed who receive income over $3000 for the year will receive a $300 rebate.
People with income less than $75,000 would get a rebate equal to the amount of taxes they paid in 2007, up to $600. Those who earned more than $3,000 but owed little or no taxes would get a flat $300, or $600 per couple.
This means that a low-income family of four – with $35,000 in income and virtually no tax liability – would get $1,200. That includes the flat $600 per couple and $300 for each child. A single person would receive the lower $300 rebate.
A single parent of two with income of $38,000 and a tax bill of $433 would get $1,033. – a $433 tax rebate plus $300 per child.
Since the bill is aimed at the middle class families making over the $150,000 ceiling would have their rebates cut according to a prescribed formula. So, hang in there one and all as we can only hope that this rebate will actually arrive in the hands of those that need it in time to make a difference.
[tags]Economic Stimulus package, Economic Stimulus, Rebate Check, Refund, Treasury, Rebate ceiling, Brookings Institution, Douglas W. Elmendorf, IRS, President Bush[/tags]