Print This Page

2008 Economic Stimulus Package Tax Rebate Calculator
Copyright © 2008 - Carl D. Goldin – Last modified 02/22/2008

To use this calculator, you need to first complete your 2007 Federal income tax return, or be able to estimate the relevant values.

Filing status (Form 1040, 1040A, 1040EZ Box 1-5)
Single Married filing jointly Married filing separately Head of Household Qualifying Widower
Number of qualifying children (Click to see definition below)
Earned Income (See definition below)
Social Security and Railroad Retirement Benefits (See discussion below)
Veterans' Disability, Pension, and Survivors Benefits (See discussion below)
Adjusted Gross Income (Form 1040 line 37, Form 1040A line 21, Form 1040EZ line 4)
Net income tax liability (1040 lines 52 & 57, 1040A lines 32 & 37, Form 1040EZ line 10)
Amount of rebate (See discussion below)

Please scroll down for definitions and explanations

The "rebate" is only available for "eligible" taxpayers! A taxpayer is ineligible if he or she can be claimed as a dependent on someone else's return, or if he or she is a nonresident alien. Estates and trusts are ineligible. A taxpayer is also ineligible if he or she has an invalid SSN (social security number), an ITIN (Individual Taxpayer Identification Number), an ATIN (Adoption Taxpayer Identification Number), or any other identifying number not issued by SSA.

Computation of the "rebate" amount

The basic rebate amount is the lesser of net income tax liability or $600 ($1200 for married couples filing jointly).

If and only if, 1) the "taxpayer" has $3000 in qualified income (earned income, social security, railroad retirement, and/or veterans' benefits) OR, 2) the "taxpayer" has gross income greater than the basic standard deduction plus one exemption (two exemptions for married couples filing jointly) (see table below) AND the "taxpayer" has a net income tax liability which is greater than zero - then the "taxpayer" qualifies for the minimum "rebate" amount of $300 ($600 for married couples filing jointly) plus an additional $300 per child. [Note that, for many of these "taxpayers", this is not a rebate, but rather a hand out (of some other taxpayer's money), since they are receiving more "back" than they paid in taxes.]

If the "taxpayer" does not meet the above criteria, they do not qualify for the minimum "rebate" amount, or the additional $300 per child. See IRC Section 6428(b)(2) as modified by the final version of HR 5140.

For taxpayers with an adjusted gross income greater than $75,000 ($150,000 for married couples filing jointly), the basic or minimum rebate amount is reduced by 5% of the adjusted gross income over those amounts, but the rebate amount will not be less than zero.

The "rebate" is an advance credit against your 2008 tax return (which will be filed in 2009). However, it is calculated based on the amounts shown on your 2007 return (which will be filed in 2008). When you file your 2008 return, the IRS will recalculate your "rebate" based on the 2008 amounts. If this results in a larger "rebate" amount, you will receive a "refund" of the difference. If this results in a smaller "rebate" amount, you will not have to repay the difference.

The "rebate" will not increase or decrease any tax refund to which you would otherwise be entitled. It is an additional credit for 2008, which you are receiving in advance.

To receive a "rebate" (which the IRS is now calling a "stimulus payment") you MUST file a 2007 tax return, even if you are not otherwise required to file. Social Security benefits, Railroad Retirement benefits, veterans’ disability compensation, and pension or survivors’ benefits received from the Department of Veterans Affairs should be reported on Line 20a of Form 1040 or Line 14a of the Form 1040A, which is normally designated for Social Security benefits only. [This should not create an additional tax liability, but it will qualify you for the refund.] Note that Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment. See IRS Bulletin.

Number of qualifying children: A qualifying child must be your child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these; have the same principal residence as the taxpayer for more than half the tax year (exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year); be under the age of 17 at the end of the tax year; not provide more than one-half of his/her own support for the year. This should correspond to the number of dependents claimed on Form 1040 or Form 1040A, line 6c, for which the "qualified" box in column 4 has been checked. Click here for additional information.

Click here to return to top of form

Earned income is all the taxable and nontaxable income you get from work.

• Include wages, salaries, tips, self-employment income, deferred compensation contributions to retirement plans, salary reductions in a cafeteria benefit plan, dependent care benefits, adoption benefits, educational assistance benefits, union strike benefits, statutory employee income, disability payments from an employer disability plan (if you are under retirement age), meals and lodging that are for the convenience of your employer or due to military service and the clergy housing allowance if included on Schedule SE.
• Also include earned income from a partnership or a farm.
• Do not include interest, dividends, pensions, annuities, Social Security, railroad retirement benefits, alimony, child support, jury duty pay, worker's compensation, veteran's benefits, welfare benefits, workfare payments, penal inmate earnings, unemployment compensation or disability payments after you reach retirement age or if you paid premiums for the disability insurance.

Click here to return to top of form

Social Security and Railroad Retirement benefits - Enter the total of the amounts from box 5 of all your Forms SSA-1099 and RRB-1099. Do not include any SSI benefit amounts. If you did not receive a Form 1099, multiply your monthly benefit amount by the number of months you received benefits in 2007. See IRS Bulletin.

Click here to return to top of form

Veterans' Disability, Pension, and Survivor's benefits - Enter the total of your veterans' disability compensation, and pension or survivors’ benefits received from the Department of Veterans Affairs. If you didn't receive a Form 1099, multiply your monthly benefit amount by the number of months you received benefits in 2007. See IRS Bulletin.

Click here to return to top of form

Net income tax liability, for the calculation of the rebate, means the regular tax liability, plus any additional tax under AMT, minus any nonrefundable personal and other credits (but not reduced for the child tax credit). To determine this figure, add lines 52 and 57 of Form 1040, or add lines 32 and 37 of Form 1040A, or use the amount on line 10 of Form 1040EZ.

Click here to return to top of form

Printing

The [Print Data] button will invoke the standard Windows print dialogue box to print a report of all the data that you have input and the calculated "rebate" amount. This feature may not work if you have pop-up blocking enabled!

The [Print Form] button will invoke the standard Windows print dialogue box to print the frame window containing the calculator, descriptions, explanations, etc. This performs the identical function as clicking "File > Print" or typing Ctrl-P. [Due to an inexplicable Windows anomaly, this function will not print values you have entered nor calculated values.]

Please note that the calculator frame window contains about 5-6 pages of information. If you don't wish to print all these pages, select the pages you do wish to print when the print dialogue box appears. You can also print selected portions of the calculator frame window by selecting the desired text with the mouse and/or keyboard, clicking [Print Form], and (when the print dialog box opens) clicking "Selection" followed by "OK".

Click here to return to top of form

The entire text of all five versions of the bill, as well as the committee reports and "official summaries", can be found by clicking here:

Click here to return to top of form

IMPORTANT: Everything stated above is for general guidance in how to use the calculator, and in how the calculator computes the estimated "economic stimulus payment" amount. It is not, and should not be construed as, legal or specific tax advice. Each taxpayer's situation is unique, and we recommend that you visit a PRO-TAX office for specific tax advice.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding penalties under the Internal Revenue Code or (b) promoting, marketing or recommending to another party any transaction or matter addressed herein.