Economic Stimulus Check Not Automatically in the Mail

People Must File Tax Returns and Not Owe Back Taxes, MU Expert Says

March 6, 2008

Story Contact:  Jennifer Faddis, (573) 882-6217, FaddisJ@missouri.edu

COLUMBIA, Mo. – More than 130 million American households will receive tax rebate checks between May and July. If individuals want to receive the economic stimulus payments from the government, the first thing they must do is file federal tax returns, according to a University of Missouri Extension tax expert.

“There were some misnomers that the Social Security Administration would share its information with the IRS and people could receive checks without actually filing, but that’s not the case,” said Andrew Zumwalt, director of the Missouri Taxpayer Education Initiative and extension associate of personal financial planning in the College of Human Environmental Sciences. “You have to file in order to receive a fiscal stimulus rebate.”

This also applies to many seniors and people in low-income tax brackets who normally don’t file federal tax returns. People who owe federal debt may not receive their tax rebate checks.

“If individuals owe back taxes, default on government student loans or default on child support payments, the government will treat the basic tax rebate like a regular refund from the government. They’ll intercept it and keep the money,” Zumwalt said. “If this happens individuals would get a letter in the mail informing them of the situation.”

The maximum rebate is $600 for an individual and $1,200 for a married couple filing jointly. Families with dependent children younger than 17 will receive an additional $300 per child. If a child is born this year the family may still receive a rebate.

“People will have a second chance,” Zumwalt said. “Individuals who don’t qualify based on this year’s taxes may file next year and receive the rebate check then.”

To qualify for the economic stimulus rebate, a person must have at least $3,000 in income, which includes most Social Security benefits, certain railroad retirement and veterans' benefits, and earned income.

“There is some confusion about whether the rebate money will be taxed,” Zumwalt said. “The fiscal stimulus payment is not taxable at the federal level, but some states may decide to tax the rebate.”

 For more information about tax-related issues visit the University of Missouri Extension Web site, www.extension.missouri.edu

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