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Economic Stimulus Tax Rebate Calculator

This article was written by in Economy. 336 comments.


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This article is for tax year 2008. For 2009 and beyond, see our roundup of 8 (or more) Ways to Benefit from the American Recovery and Reinvestment Act of 2009 (AKA Stimulus Plan).

Updated March 18, 2008 with an estimated schedule of payments.

President Bush has signed into law a $165 billion economic stimulus package providing rebate checks to taxpayers. You might receive a check for $300, $600, $1,200, or even more depending on your conditions.

Originally, PBS Newshour provided a calculator to help taxpayers to determine the amount of the rebate, but that calculator has been proven to be faulty. With the help of Consumerism Commentary reader cdg, I’m now including a new calculator, revised several times over the past few days to increase clarity and accuracy. This calculator properly takes into account the information from the bill passed by Congress and signed into law by the President (H.R.5140) and has been verified by CPAs and tax accountants. However, any information presented should not be considered tax advice.

The validity of the result depends on the accuracy of the information you enter. Before entering the data or asking any questions, please scroll the calculator down to read the definitions and read all the comments at the bottom of this post.


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Since this “rebate” is an advance for a new credit which will be included on the 2008 1040 income tax form, it will not affect your 2007 taxes. In April 2008 (this year for 2007′s tax settlement), you will receive what you are owed or you will have to pay what you owe as if the rebate never occurred.

This summer you will receive the rebate for the 2008 credit as calculated above.

In April 2009 or thereabouts, when you file your taxes for 2008, the IRS will run the calculation for the stimulus rebate credit again. If the results show that you would have received more (due to an additional child, for instance), you will be sent the difference. If your results show that you would have received a smaller rebate, then you get to keep the difference. This is an additional credit. You do not have to pay back to the IRS what you will receive this summer. Receiving this advance will not reduce next year’s refund nor will you owe more federal tax.

March 18 Update: The IRS has released a schedule estimating when you will receive your rebate.

Updated March 21, 2011 and originally published January 28, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 336 comments… read them below or add one }

avatar James

Individuals that earned $86,999 in Adjusted Gross Income would get back $240. But darn those folks that made $87,000 while paid the majority of all the income taxes. They get nothing!

“Rebate”?! HA! A rebate is defined as a return from an original payment.

If you didn’t owe taxes and you earned as little as $3,001 you’ll get a $300 handout! Alright! Free money that you didn’t earn!

This is wealth distribution and I don’t care for it. People that didn’t even pay taxes are getting a handout.

Sheesh…if you’re filing jointly and earned $173,999 combined you get to PAY the government $240 MORE, according to this calculator.

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avatar Luke Landes ♦127,365 (Platinum)

The idea is to get money in the hands of people who will stimulate the economy… it’s probably wrong to call it “tax rebate” thanks to the newer addition that those who didn’t earn enough to owe taxes should still receive money.

The calculation for the $173,999 earning couple is obviously incorrect. No one is paying MORE taxes due to this plan.

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avatar James

Well, by the governments logic, they should give it all back and lead us into a capitalist revival of which the world has never seen.

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avatar Shana

This is an interesting calculator. I recently wrote about why I don’t like the tax rebate — and that’s based on how it may be distributed. According to the calculator above, I will receive $1200 [if the bill goes through as is], which is the exact amount someone with an AGI of $3001 will receive. I wish I could receive 30% of my income as a rebate…

This is not a rebate.

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avatar juggler314

I couldn’t agree more with shana (I read your post too). I make a pretty good living somewhat above 6 figures depending on my bonus. Nonetheless my salary living in the heart of Manhattan does not stretch very far. I wouldn’t mind seeing something linked to cost of living at least – someone making 74,999 in the middle of the country has far more actual cash available than I do here since the cost of living is about 2x. It’s yet another benefit I pay into with my taxes that I’ll never see a dime of (added to SS, and many other tax rebates that get phased out at my income level).

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avatar Brian

I think it is funny that a lot of the same people who understand that we shouldn’t be giving out the “rebate” in the first place then get jealous that they’re not getting one when others are.

I’m not going to be getting a check, but I don’t think the government should be writing checks when we’re already in the biggest national debt in history…hence I don’t complain. This “stimulus package” is a bad idea all around, so the cheaper it ends up being in the long run the better.

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avatar Jeff

This is exactly what is wrong with the world, who cares what other people are getting back?

Any discussion should center on the economic utility of the plan. Will it work to add money into the marketplace? Doubtful – I know I will be reducing my debt with my check.

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avatar Matt

Well reducing debt with the package can help your finances some, and for people like me who would rather spend some money monthly on items instead of just credit bills, it certainly could help the economy. Doesn’t mean we all have to spend the $300 instantly!

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avatar ken

those don’t pay taxes get 300 while those paid a lot of taxes got nothing? Do these politicians have brains? Don’t call it a rebate for crying out loud.

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avatar shudderette

Oh, it gets worse. We didn’t pay anything in taxes this year but by this calculator we’ll be getting $1200 back (family of 4 making 24,000).
Don’t complain to me, I didn’t ask for this money. They think it’ll stimulate the economy. I’ll be doing my part, I won’t be paying down bills. I’ll spend every last penny of it while on vacation in Branson (hey, at least it’s not Paris or something, right?)

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avatar Nathan

From what I’ve read elsewhere, this calculator seems to give the wrong answer if you owed between $1 and $1199 in federal income tax.

My understanding is that if your are a married couple filing jointly with no children with more than $3000 AGI:

* If you owe $1 – $600 in federal income tax, you get $600.

* If you owe $601 – $1199, you get that amount.

* If you owe > =$1200, you get $1200.

Have I misunderstood something?

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avatar Brandy

Why does it say “Do yo OWE taxes for 2007?” Wouldn’t it make sense for it to say, “Did you pay taxes for 2007?” When I put in NO it drops me down to $600, but when I put YES it takes me back to $1200. My husband and I don’t owe taxes but we did pay taxes. I don’t understand. You get more money back if you OWE the IRS?

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avatar Luke Landes ♦127,365 (Platinum)

Brandy: It’s not referring to whether after calculating your 1040 form you’ll be receiving a refund or owe additional tax… If you paid tax in 2007 on your 2007 earnings then you owe taxes for 2007 (unless you’re getting the full amount refunded to you).

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avatar Pete

If I am in a payment plan with the IRS for 2006 Taxes will I get any rebate, according to the numbers we should be getting $1800

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avatar Sandy

I don’t understand this much at all. I am married and file jointly. We will be getting back approx. $900 for 2007 rabate. How does this proposed stimulus tax effect me? Will I owe or receive any of it? Our combined income was about $76,000

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avatar Mandi

I dont understand this at all either. My husband and I made 65k this year. We owed in federal 469.00 and state 303.00 so we didnt get a “refund” but we did pay taxes. We have three children. So Will I actually get the proplsed stimulus package or since we owed more taxes and paid the goverment do we now get disqualified? So confused!

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avatar GDSLONE

that is your choice to live where you do. what does that have to do with the person that lives in Nebraska and makes as much as you. Sounds like they are just more wise, or don’t really care about having the option to see broadway plays, and have amazing dinners. You shouldn’t get more refund. And i’m speaking from the stand point of someone that lives in San Fran, i iknow the high cost of living.

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avatar SavingDiva

Thanks for the calculator! I think this “rebate” will be the topic of hot discussions for the next few months!

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avatar Dixie Dick

Hello,
I have been led to believe that if I am on Social Security but pay taxes, I would not receive a tax rebate.
Both my wife and I are fully retired receiving a govt. pension (wife) and retired military pay, social security and state retirement (spouse)with an adjusted income of about $80,000. Please calculate.

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avatar Monster

I don’t think this calculator works right. If you put in any amount more than $3000 (singly) and less than $75,000, it gives you the full amount ($600). I read the bill for myself and it says you will only get back as much as you put in, up to $600 singly or $1200 jointly. It’s actually written as a credit towards your 2008 taxes, more like a pre-bate than a rebate. How do they know how much you will make in 2008? I guess they will use 2007 as an estimate, and then calculate it correctly at tax time in 2009. Some people might make more in 2008 than in 2007, so they wouldn’t get as much as they should, but the bill says it won’t pay after Dec. 31, 2008. So they can’t give you more money at tax time in 2009 if they should have. So, what will they do? Probably give everyone the full amount and then charge you for what they overpaid if you didn’t make enough to qualify for the whole thing! I know most people don’t do their own taxes, but some of us do and I’d like to really know what to expect. Technically, the calculator works right, because they will probably give us all checks for the full amount, and then ask those of us who don’t owe that much to give some back at tax time. To hell with the lower class!

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avatar Melody

After all of my education credits, hybrid vehical credit and such I ended up not having to pay anything in, but I did have a tax to reduce before the credits. So will I get 600 or 300?

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avatar howard

IF YOU RECEIVE A PENSION OVER 15OOO DOLLARS AND PAY TAXES ON IT BUT GET IT ALL BACK AND FILED JOINTLY. WHAT KIND OF A REBATE DO YOU RECEIVE. MY WIFE AND I ALSO RECEIVE SOCIAL SEACURITY.
HAVE A NICE DAY.
HOWARD

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avatar Scott

People are being confused by the term “Owe” taxes. If you had an income you owe taxes. It means the same as paying taxes, not if you have to pay additional when filing or getting a refund. When you pay or get a refund when you file it is because you either under or over paid your taxes. I panicked at first thinking I wouldn’t get a check because I had a refund then read through things a bit more and it became clearer.

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avatar Luke Landes ♦127,365 (Platinum)

Thanks for that clarification, Scott. You’re exactly right. Except for those on the very, very lown end of the income scale, if you *earned money* in 2007, then you *owe taxes.* It has nothing to do with whether the IRS sends you a check after filing your taxes or if you have to pay them… that’s just to catch-up with the tax you paid throughout 2007 in each pay check.

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avatar howard

DOES THIS MEAN THAT MY WIFE AND I WILL RECEIVE 300 DOLLARS A PIECE OR 600 HUNDRED DOLLARS A PEICE
HOWARD

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avatar Julie

Will you get this money if you owe taxes to the IRS from a previous year or do they keep it then? Anyone know?

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avatar cowlover

Folks, the adjusted gross income number the calculator is referring to, is the bottom number on page 1 of the Fm 1040. What this is comprised of, is all of your taxable income (including some portion of your social security, depending on your age and your other income) less certain deductions that are allowed from that total (like alimony paid, educator expenses, IRA deduction and others). This is before any standard or itemized deductions (like mortgage interest, etc.) and personal exemptions are deducted, and before any calculations are made concerning whether you will get a refund or have to pay taxes to the Feds. I am a retired accountant who had a tax business for 15 years, and many people get confused about what all these terms mean. Grab a copy of your last year’s taxes, and look it over. It basically adds up income, allows some deductions, allows you some living expenses (standard or itemized deduction and personal exemptions), gets you to a net taxable income number and calculates your tax based on that number. Then there are some credits against that number, more taxes added in if you are doing some oddball (for most of us) stuff, some more credits and then you get to a final tax number. THEN the form looks at what you have paid in (and some credits will come in to help you out, like earned income credit if you qualify, and if you have paid in more than what is owed, you will get some money back. If not, you pay in on April 15th. Just grab your tax form from last year and give it a lookover – ignore all the things you don’t know about – just look at what the form is doing – and I think the tax process will be a little clearer for you. Hope this helps!

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avatar Dawn

I find it amazing.. I’m a single parent of a 2 year old. My AGI is roughly 88K. I receive NO child support from my ex (he’s at the poverty level in my state due to child support for a child of a previous marriage).

HE will get back $600, and his income was only $23K last year so obviously he PAID a whole lot less taxes.

I will be lucky if I get $340 back, INCLUDING the rebate for the child.

I am actually considering having HIM take the child as a deduction this year and paying me the $300 when he gets it.

It’s insane. I pay more taxes, do more support of the child, but yet I’m not entitled to a fraction of the rebate that the non-supporting parent would get.

I have a good mind to send my State Senator (Ms. Hillary) a letter.

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avatar Ric

This stimulus nonsense demonstrates again why we should replace the payroll tax and income tax with a tax on non real property transaction public, business, and government. Exclude services performed in the US, Rx drugs, Medical devices, used finished goods, financial instruments and groceries for home consumption.
Tax everything else every time anything changes hands or is imported.
It’s not regressive because most of the basics of life are untaxed for everyone.
When the economy is overheating raise the tax.
When a stimulus is needed cut the tax.
The effect and response would be immediate…. it would be fair……..and it would make labor in the US more competitive because there would be no payroll tax to be paid by US manufacturers

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avatar Scott

It appears that many people don’t understand the point of these “rebates.� They hear money and think they everyone should get some or it’s not fair. The point is to get it to people who are more likely to spend it as discretionary income who may not be doing so now. If you are over the income limits the assumption is you already have discretionary income and don’t need incentive to spend. If you don’t earn enough to be taxed there is no way you are going to spend this money on goods the boost the economy. Those who are in between get the checks in hopes that it will be spent instead of saved or pay off bills…thus stimulating the economy and in theory improving the overall financial health of the country. It’s just another tool to adjust the economy just like the Federal Reserve does in adjusting interest rates (raise rates people save, lower rates people spend) and the Treasury does but making more money or removing it from circulation to affect the value of the dollar.

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avatar catlover

How does this effect next years tax returns?

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avatar Lynnbug

I am also very interested to know if a person owes taxes from previous years will they still get the rebate check?

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avatar Dawn

Just because someone is at a higher income level doesn’t mean they have higher discretionary income. In some cases (like mine), what I make, with a child, is JUST enough to get by (daycare easily costs, for an infant, upwards of $15K a year), any decent apartment is minimum $1,500 a month.

I spend, I actually LIKE to spend, and I’d gladly pour $900 into the economy by buying my daughter clothes or gifts that I otherwise couldn’t afford to buy.

But, if you read the surveys, MOST people are planning to pay down debt or save their rebates, so I don’t think the darn thing is going to do much good.

I actually DID send a letter via Hillary Clinton’s website (she is one of my State Senators).

BTW.. does anyone know? How does the IRS know your marital status? For example, if my divorce was final on 12/31, how do they know that???

My date isn’t that close, but pretty near, so I was married for 350 days out of the year, single for 15 but I have to file single.. which also causes me/us to lose literally thousands of dollars in deductions.

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avatar Scott

On the calculator, i’m not sure how to define my ‘paid tax’ situation.

I am married with kids and a house and mortgage. Wife stays home with the kids, so she has no income.

I make 42K, but paid just $300 in fed taxes, which i’ll get all of it back. In addition, i get some more money back for the Additional Child tax.

So, am i categorized as paying taxes for 2007?

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avatar Sassy

If you receive social security disability benefits and are not required to pay taxes, do you receive a rebate at all?

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avatar snowbaby

My mom lives on about $600 per month which comes from a VA pension, Social Secuity and PERA. She lives in a building where her rent is based on income. If she takes this rebate all it will do is make her rent go up and/or reduce her VA pension, isn’t that right? I don’t see the value of this at all!

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avatar Dawn

Ok I am real confused! My husband is in the Military and has been deployed since Jan 07. We had no taxable income last year but our income was 49,500. We did recieve child tax credits for our dependant children this tax season. So are we going to qualify for this “rebate” ?

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avatar Julie

Ok. . . .so if I underpaid my taxes and have get no return and owe the IRS because I didn’t have enough withheld will I not see the money? I would appreciate any feedback, thank you.

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avatar cdg

This calculator, “courtesy of PBS Newshour”, is a prime example of why NOBODY should rely on ANYTHING they see or hear on PBS.

The “economic stimulus rebate”, as proposed by President Bush, as passed by the House, as modified by the Senate, and in its final form, is designed to be a tax rebate, eliminating the 10% bracket for most taxpayers. As such, it is designed to be a return of the taxes you have paid.

The “rebate� amount is the lesser of your net income tax liability or $300 (for single taxpayers) or $1200 (for married persons filing jointly) plus $300 per dependent.

If the taxpayer has earned income or social security benefits in excess of $3000, they will receive a minimum rebate of $300 (for single persons) or $600 (for married persons). If someone qualifies for either rebate, they will also receive $300 for each of the children claimed as dependents on their returns.

In the original house bill the criteria for qualifying for the minimum rebate was having an adjusted gross income (AGI) of $3000. This was replaced in the final version by $3000 of “earned income” or social security benefits, so as to share the “rebate” with those who don’t pay any taxes. However, the size of the rebate is a function of tax liability, not AGI!

PBS’ calculator uses AGI rather than taxable income, to determine the size of the rebate. This was/is incorrect for all versions of the bill.

If you need a calculator to perform the simple arithmetic to determine the size of your rebate, follow these steps:

1) Did you (and your spouse if you file jointly) make more than $3000 in earned income (wages, salaries, etc. but not including investment income) and/or social security (not including SSI) benefits? If yes, then you qualify for at least the minimum rebate.

2) What is your (anticipated) tax liability for 2007? See line 44 (Form 1040) or line 8 (Form 1040A) or whatever line is labeled “Tax” on Form 1040EZ.

3) For single persons (including head-of-household, and married filing separately): If your tax liability for 2007 is less than $600, your rebate amount is equal to your tax liability for 2007. If your tax liability for 2007 is not less than $600, your rebate amount is $600. If your tax liability for 2007 is less than $300, and you answered “yes” in step 1, your rebate amount will be $300.

4) For married persons filing jointly: If your tax liability for 2007 is less than $1200, your rebate amount is equal to your tax liability for 2007. If your tax liability for 2007 is not less than $1200, your rebate amount is $1200. If your tax liability for 2007 is less than $600, and you answered “yes” in step 1, your rebate amount will be $600.

5) If you qualify for a rebate, add $300 for each dependent.

It’s far easier to calculate than it is too explain, but PBS is too busy promoting their liberal agenda to provide an accurate calculator.

As far as being an “economic stimulus”, the rebate is too little, too late, and too inflationary. It would make far more sense to provide a permanent tax cut. That would stimulate the economy, and spread the wealth across the board. But that flies in the face of liberal mantras, no matter how many times it has been proven true, so the “Democratic” Congress won’t even consider it.

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avatar Nancy

I was wondering if I am planning on making installment payments for additional tax owed for 2007, will I still receive the stimulus rebate check?

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avatar cdg

In reply to comment #40 by Nancy:

Q: I was wondering if I am planning on making installment payments for additional tax owed for 2007, will I still receive the stimulus rebate check?

A: The rebate check will be based on the tax shown on line 44 of your 1040 (as well as earned income, social security income and adjusted gross income, for purposes of computing the minimum and maximum due). It doesn’t matter whether you have a refund coming, or owe taxes at the end of the year; and it doesn’t matter whether you pay the taxes you owe with your income tax return or with an installment agreement reached with the IRS.

However, the IRS can “offset” ANY tax refund to pay amounts owed to federal or state government agencies (including, of course, the IRS). Whether or not they will do this with tax rebates is anyone’s guess. The bill passed by Congress and signed into law by President Bush does not cover this situation, thus leaving it up to the IRS and the courts to decide.

In my earlier post, I neglected to mention that the rebate is not available for “higher income” tax payers. So, if you make more than $75,000 ($150,000 for married filing jointly), you are out of luck. The liberals don’t think you are entitled to a rebate of any of the extortionate taxes you have paid to finance their socialist programs.

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avatar Luke Landes ♦127,365 (Platinum)

cdg: No one is “entitled” to a rebate, regardless of income level. The idea is to get the funds into the hands of the people who would most likely stimulate the economy (or give the appearance of doing so), not because they “deserve” some money back as a reward of some sort.

I agree that the whole maneuver is mostly for show and the economy will likely improve later on this year regardless of the rebate.

Sending money to the masses is mostly a political move… with an eye towards boosting approval ratings rather than the economy (though the two are often correlated when “sentiment” is the first measure of the economy).

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avatar cdg

Flexo: I disagree. Everyone is entitled to a rebate of all the taxes they have paid, as we have received nothing of value for our (forced) investment. But I don’t expect those whose power base is supported by the tax system to agree.

I understand the (flawed) concept of stimulating the economy by putting additional money in the hands of those who are more likely to spend it than to invest it. But, if the economy is in such dire straits, people are more likely to use the money to pay their mortgages, rents, utilities, and other bills, than to go on a shopping spree. It’s insulting to everyone that the Administration and Congress think we will all behave as though we were ######-rich.

However, the sole reason there is a cutoff in the “rebate” based on income level is the warped liberal mantra that “the rich” (however that is currently and conveniently defined) do not “deserve” to benefit from any tax cuts.

Left alone, the economy might improve later this year. But the more the government tries to solve the problems (that they create), the worse the problems will be.

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avatar Stephanie

So – where is a calculator that takes VA disability/SSI into account?? I am on VA disability, my husband works fulltime, our joint filing is for less than 50K AGI, no children at home … would we see the 1200 for a couple, or do we see 1500 with the addition of the VA disability “rebate”?? no one can seem to explain that to me …

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avatar cdg

Stephanie: To my knowledge, there is no separate “VA disability/SSI rebate”. The Senate added a provision to the “rebate” bill to give a minimum of $300 to people with at least $3000 in social security retirement income and/or earned income, regardless of whether or not they pay taxes. [SSI benefits are not social security benefits for purposes of this law.] Those covered by this provision would not otherwise receive any “rebate” (since they had not paid any taxes to be rebated).

As I stated above, the PBS calculator does not provide the correct result for anyone, as it does not request the data necessary to do so. A better rebate calculator can now be found at http://www.yourmoneypage.com/family/rebate2008a.php. However, it doesn’t take into consideration the phase-out of the rebate for those with “higher incomes”. So it won’t work if you have an AGI greater than 75,000 (single) or $150,000 (married filing jointly).

Since _your_ AGI is less than $150,000, you and your husband (jointly) should receive a “rebate” of the lesser of the income tax liability shown on line 44 of your 2007 Form 1040, or $1200. If that is less than $600, but you have (combined) earned income and/or social security benefits in excess of $3000, you should receive a “minimum rebate” of $600.

If “no one can seem to explain that to” you, it is because you have been asking the wrong people. The news media has completely botched their coverage of this, as they do with all tax legislation, and focused on who it supposedly benefits, and who it supposedly leaves out, and how unfair it is to this or that group, while favoring this or that group. They are too busy with their predictable propaganda to find out what the legislation actually says.

An accurate summary as well as the entire text of the House Bill can be found here: http://thomas.loc.gov/cgi-bin/bdquery/z?d110:H.R.5140:

It’s too bad PBS didn’t bother to read it before they created a useless calculator that has been copied all over the internet

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avatar cdg

I’ve created a more accurate calculator, and posted it at: http://www.chateaumezcal.com/2008taxrebate.html

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avatar rk

my earned income was $3309…AGI 2559 after all the deductions etc…i got a refund of 434…(filed single) no children….will i get the $300 or what????? confused!!!

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avatar cdg

To #47 (rk):

If your 2007 earned income was $3309, and your AGI was $2559, and you filed single with no dependent children, you should get a minimum rebate of $300. If your tax liability (not your refund) was more than $300, you will get a rebate equal to the tax you paid, or $600, whichever is less.

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avatar Luke Landes ♦127,365 (Platinum)

cdg: Thanks for providing a more accurate calculator. I’ve incorporated it in the post above.

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avatar Dogberry

Re “Number of dependent children”, are you sure that is the number that is going to be used? I heard that it was going to be the same number that is used for the child tax credit, ie, age 16 and under.

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avatar cdg

To: Dogberry

You are correct (although that is what I meant by “number of dependent children”). The text will be changed to read “Number of qualifying children (Form 1040 line 6c)” later today.

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avatar cdg

To: Dogberry

You are correct (although that is what I meant by “number of dependent children”). The text will be changed to read “Number of qualifying children (from Form 1040 line 6c)” later today.

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avatar taxin

Another thing to consider when trying to “guesstimate” your rebate is the term child as I understand it a child for rebate purposes is the same as for child tax credit purposes, can not be over age 16 dec. 31,2008. I have two dependent children that I claim for dependent exemption but they will not qualify me for the extra $300 per child. Just something else to think about.

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avatar Shannon

I don’t understand why the calculators say we are getting back 1200.00 dollars. I thought it was 1200.00 per married couple plus 300.00 per child. So, I have 2 children so I should be getting 1800.00. Why is this?

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avatar cdg

To Shannon:

For a married couple file jointly, the rebate amount is the LESSER of your net tax liability or $1200. If your net tax liability is less than $600, and you have more than $3000 of qualifying income, you get $600. Then, we add $300 for each qualifying child.

So, if (my) calculator is giving a result of $1200, the net tax liability (that you entered) was less than $600, and you got a rebate of $600 plus $300 per child.

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avatar Jon

What a great calculator! I think this is just what a lot people have been looking for.

I wanted to embed it in my blog, but there were some problems with the HTML file and formatting. I hope it is OK, but I slightly modified the code so it would display correctly.

Thanks for posting such a great tool.

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avatar KB

So … am I reading this correctly? It sounds like it would REALLY behoove me to make sure I am not over withholding in 2008.

If I am due a refund next April, they will reduce it for this year’s stimulus package

If I owe money, or owe nothing, then I will get to keep this year’s stimulus package?

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avatar Jenn

CDG – how will this rebate affect our true tax rebates in 2009? For instance this year my husband and I recieved $6200 back on our income taxes. Does that mean if we get $1800 this year because we have 2 kids that we will only get $4400 next years rebate?

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avatar cdg

To: #56 by Jon

Thank you for your kind words. Ironically, I was looking for a calculator on Monday, so I WOULDN’T have to read the entire tax bill. I couldn’t find an accurate one, so I ended up reading the bill AND all the code sections it cites by reference, AND then writing my own calculator. I hope everyone finds it useful.

>What problems did you find with the HTML file and/or formatting? I would prefer to fix such problems then have multiple versions of the calculator out there. That way, if I need to modify something, it can be done in one place.

To: #57 by Jenn

I don’t know what you mean by “our true tax rebates in 2009″. The Tax Stimulus REBATE will not affect your income tax REFUND for ANY year. [Nor, according to the text of the law, will it be considered "income" for those who receive low-income-based benefits.]

The difference between a tax rebate and a refund (theoretically) is that a rebate is a return of taxes that you owed and paid, whereas a refund is a return of taxes that you overpaid.

If you compute your taxes for 2007, and find that you overpaid, you get a refund. [If you underpaid, you have to send the IRS more money.]

The same for 2008 and every year.

But, regardless of whether or not you overpaid or underpaid, whether you received a rebate or sent the IRS a check, you get a rebate if you qualify. It doesn’t affect your taxes for this year or next.

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avatar Jon

cdg

The changes I made were to fix the embed link so it would actually work, and to move the top and bottom text into the table and to change the background color of those cells to white.

That way it looks the way it was intended even on blogs like mine with a dark background. you can see what I did here: http://www.jonbarclay.com/myblog/checks-from-uncle-sam/

Oh and one thing which I didn’t change but is broken is the link to Chateau Mezcal. It generates a 404 error now.

I hope I didn’t step on any toes by doing that, it really is a great tool.

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avatar rk

thanks cdg!!

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avatar Julie

So if we owe money back to IRS because we didn’t have enough withheld we are still going to get this rebate?? I am so confused on all this, thanks to anyone who can help me. I appreciate it.

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avatar cdg

To #61 (Julie)

If you are eligible for the rebate, you should receive it whether you “owe money back to IRS because you didn’t have enough withheld”, whether you have a refund coming (because you had too much withheld), or whether you had just the right amount withheld (which would be a miracle).

The amount you owe the IRS (or the REFUND you have coming) does not affect the size of your REBATE.

The rebate is calculated based on your net tax liability (your computed tax bill plus AMT (if applicable) less certain credits), not the amount you paid or didn’t pay during the year.

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avatar Jenn

Thanks cdg. Sorry about the terminollogy. But I think I understand this now. The REBATE we are going to get this year will not affect my REFUND next year. I was really concerned that is was just an advance on my REFUND for next year.
THANKS!

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avatar Julie

Thanks cdg VERY MUCH for your help! I keep hearing different things so I didn’t know what the truth was. I just assumed the IRS would automatically take it from me if I owe them money. So basically most people who work will get this rebate unless they earn more then 75,000 for single or 150,000 for married correct? I am so surprised, thought the IRS would for sure take that money that I owe them. Are you 100% sure on that?

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avatar cdg

To #63 (Jenn)

Your confusion is understandable. Congress (and the news media) have emphasized that this is (technically) an advance REBATE of (some of) your 2008 taxes (except for many people the rebate will be greater than the taxes they pay, and thus is a handout, not a rebate).

And, in fact, after you file your 2008 return, the IRS will re-calculate your rebate, and (possibly) send you another check. This would happen, for example, if you had an additional child in 2008, and thus qualified for another $300. However, the inverse is not true. If the re-calculation shows you be “entitled” to a smaller rebate, you will NOT be asked to return the “overpayment”.

Regardless, your REBATE will not affect your REFUND or your tax liability.

This is all assuming that Congress doesn’t change the tax laws again.

The “Red Queen” (in Lewis Carol’s “Alice in Wonderland”) said to Alice, “I could have done it in a much more complicated fashion”. She obviously had no experience with Congress (or HTML).

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avatar lawhoo97

spend, spend, spend…

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avatar cdg

To: #64 (Julie)

>”I just assumed the IRS would automatically take it from me if I owe them money. So basically most people who work will get this rebate unless they earn more then 75,000 for single or 150,000 for married correct? I am so surprised, thought the IRS would for sure take that money that I owe them. Are you 100% sure on that?”

Do you mean that you have a balance due on this year’s income tax return, and are paying the balance due with the return? In that case, the IRS shouldn’t take your rebate from you.

However, if you owe money for previous years and are making installment payments and/or are considered “delinquent”, the IRS will most likely intercept your rebate, just as they would intercept a tax refund.

They may also “offset” your refund (and presumably your rebate) to pay various delinquencies to other federal and state agencies (for example, child support and student loans).

The original theory behind the tax rebate was to stimulate the economy by putting money into the hands of those who (theoretically) will go out and spend it right away. President Bush proposed to do this by returning some of the taxes that we had already paid. Congress decided to also give money to those who don’t pay taxes, and not give it to those who pay the most taxes. That’s why it is so complicated.

Even singles making more than $75,000, and married couples making more than $150,000 will receive a rebate. But the rebate amount is reduced by 5% of the amount exceeding the $75,000/150,000 threshold. So a single person with no dependents with an income of $86,500 would still receive a $25 rebate. The rebate amount wouldn’t become zero until he/she made $87,000. Of course, he/she will then have paid $15,000 in taxes — and received none of it back to “stimulate the economy”.

If the goal were truly to stimulate the economy, Congress would have done better to permanently reduce the tax rates for everyone, “rich” and “poor”. But they are not trying to accomplish anything but to “look good” in an election year. That is why they are more concerned about getting refunds to the masses, than to actually fix the economic problems they created.

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avatar cdg

To: #57 by KB

It doesn’t make one bit of difference if you are over-withheld or under-withheld in 2008. You will still get precisely the same rebate and precisely the same refund (or tax bill) as you would without the stimulus package.

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avatar Julie

Yes I am making installment payments for last year’s taxes so I will assume I am not getting the rebate and they will just intercept it and pay that. Thank you for all your help cdg!

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avatar LatinTexan

My wife are in our 20′s and our income for 07 was $169,000 and we get a lousy $300???? I can’t imagine what it’s going to be like in 10 years.

It’s embarrassing to think only a few years ago I was a registered democrat (young, naive, college graduate)!

Can you say redistribution of wealth?

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avatar Samantha

My earned income was $2663, but my AGI was 18881. I filed married with one child. My federal return was $4360. I was above with my AGI, but under with my earned income. Does this mean my and my husband will or won’t be getting a rebate? I filed a 1040a and the lines for the calculator don’t add up.

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avatar cdg

To: #72 by Samantha

I can’t compute your rebate from the information you provided. What do you mean “my federal return was $4360″? Do you mean your refund or your tax liability was $4360? The former is irrelevant, but you need the tax liability to compute your refund.

Based on the figures you provided, if your net tax liability was $0, you will not receive a rebate. If it was $1 or more, you will receive at least $900. If it was more than $900, you will receive somewhere between $901 and $1500 depending on the net tax liability.

[This brings up the possibility that NOT taking certain deductions and/or credits may increase your tax liability, but may increase your rebate by a great amount.]

I have modified the calculator to specify the line numbers for Forms 1040A and 1040EZ as well as Form 1040. Try it again, and see what you come up with.

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avatar Samantha

I was confusing my earned income with my earned income credit. Line 7 was 18550, line 21 was 18550, but my tax liablity on line 37 was 0. I can’t get the calculator to work anymore but based on what you said I guess I’m not getting a rebate. Really wishing I could send the IRS that $1 now.:) Thanks for your help.

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avatar cdg

To: #74 by Samantha

Married filing jointly, 1 qualified child, earned income $18,550, AGI $18,550, tax liability $0. The calculator shows a rebate amount of $900.

BTW, if you did need to send the IRS that $1 (which you don’t), you could always file an amended return. :)

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avatar samantha

Thank you so much for your quick help! I know some people are mad that low-income people like me are getting a rebate, buy every little bit helps. 3 years ago my husband and I worked at a plant and made very good money, but that plant is now in mexico. We are both going to school and trying to keep our heads above water. To us “low-income” people, this is kind-of to little to late.

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avatar don9664

i recieve disability, i made only 9000 dollars last year and dont have to report it, will i get any money?

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avatar Sam

Interesting that a commenter is providing more in-depth information and answers than Flexo…

CDG: do you have a pf blog? Because I’d be interested to read if you do. You write very clearly.

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avatar Bernard

Here’s where I’m confused.
I was laid off in 2007 and most of my income was in Unemployment.

I paid $651 into taxes, but line 37 on my 1040A says “0″.

Earned Income – 3011
AGI – 9004
Married Filing Jointly, with 1 child dependent.

I’m just curious and wanting to make sure that, even if our Liability is $0, we’ll still get the rebate.

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avatar Luke Landes ♦127,365 (Platinum)

Sam: I have no problem allowing the blog to be a conduit between those who have questions and someone who is happy to answer them. CDG provided the calculator; I’m happy he’s also willing to provide explanations for those who request.

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avatar cdg

To #78 by Sam: I don’t know what a “pf blog” is. I do have a website (www chateaumezcal com), where I express my opinions on a variety of subjects.

To #79 by Bernard: Unemployment benefits are not considered “earned income”.

If you “paid $651 into taxes, but line 37 on your 1040A says 0″, I assume that you received (or will receive) an income tax refund of $651 (or more if you had a refundable credit). If this is the case, you actually paid $0, not $651, since you get back what you had paid in advance.

WIth an Earned Income of $3011, AGI of $9004, Married Filing Jointly, and 1 QUALIFIED child dependent, you should receive a “rebate” of $900, even though you paid NO taxes. Say “thank you” to the Democratic Senate for their generosity with other people’s money.

To Everyone: Regrettably, I will be unable to answer any further questions on this subject, as I simply don’t have the time. If you discover any errors in the calculator, please report them to me at taxrebate @ chateaumezcal.com, and I will try to fix them. Thank you.

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avatar Dr B

I think it sucks. Putting the country further in debt. I won’t be getting a cent, but even if I was I think it is stupid to indebt our children.

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avatar FauxNixon

If it gets people to start dumping the money into the economy, it should prove effective, I’d imagine.

In any case, the calculator is quite useful for estimation.

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avatar shardede

I have a question: I had enough income to, normally, have tax liability, however we adopted a child last year and due to the Adoption Tax Credit our tax liability was zero – the full amount paid was refunded. If I understand your calculator correctly, we (married couple with two kids) get $1200 instead of $1800 because of the zero tax liability. Is that really how the policy is written, that if your tax is zero due to special credits rather than low income, then it reduces your rebate?

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avatar Bernard

I know this has been answered, but I was still confused for a bit so I figured someone might find this helpful.
In reply to Samantha, I was confused about the $1 as well and actually started doubting that we would get a rebate.
It’s not stating that you had to pay a dollar to get the rebate, the way I understood it, but rather that $1 is the minimum liability to receive the $600/person rather than $300.
If you had no tax liability, but earned income was $3000+, You are entitled to $300/person(Single/Joint + Children)no matter what.

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avatar cdg

To #85 by Bernard:

You still have it a little confused. :(

If an “eligible” (see definition in the calculator footnotes) “taxpayer” has more than $3000 of (earned income and/or social security benefits and/or veteran’s disability benefits), they will receive the minimum “rebate” of $300 ($600 for married couples filing jointly) PLUS $300 for each qualified child. In this case, it doesn’t matter whether or not they have a net tax liability.

Alternately, if an “eligible taxpayer” has a gross income that is greater than the basic standard deduction ($10700 in 2007) plus the exemption amount ($3400 in 2007) plus a second exemption amount for married couples filing jointly, AND they have a net tax liability greater than zero, they will receive the minimum rebate described above. This is where the Net Tax Liability is very important.

And finally, if a taxpayer’s net tax liability is higher than the minimum rebate amount, or they don’t qualify for the minimum rebate amount, their rebate will be the smaller of their net tax liability or $600 (or $1200 for married couples filing jointly). So the Net Tax Liability is important here as well.

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avatar Bernard

Thank you for clearing that up.
It doesn’t change what I can expect either way, and I’ve gotten the same answer in every place I’ve input the information($900).
Some of the verbiage used gets confusing.

Also, thanks for making the calculator and taking time to answer questions.

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avatar cathy

I don’t understand if a person didn’t pay taxes but made the $3,000 how can they get money back since? Where is the record that they worked at all. The IRS doesn’t even want you to send in paper work if you don’t owe them or they don’t owe you. Makes sense as it would be just a waste of time.

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avatar Luke Landes ♦127,365 (Platinum)

Cathy: You’ll have to file the paperwork in order to receive the credit.

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avatar Bernard

They’re actually telling a lot of people to file whether they’re required to or not, just in case.
For instance, I had to file because of the unemployment benefits I collected anyway because it raised my Adjusted Gross Income.
However, everything I paid was refunded so I had no Net Tax Liability, which means I’m only eligible for the $600 for Married Couple and $300 for eligible child.

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avatar checho

@ DAWN:
I got married Dec 25 and managed to file JOINT for that year…

so i’m on the opposite side of the fence…i was married for 5 days in 2006, yet got to file joint and reap the benefits…

but i don’t know if the IRS has a way of verifying ..

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avatar Hank

People asking why more of the rebate doesn’t go to people earning more than 87000 are fools. If you had $600 to give to somebody to stimulate the economy would you give it to bill gates or a poor family with kids? Who is more likely to spend the money? I a pretty rich guy. If you give me $600 im going to put it right in the bank on top the pile of money I already have in there. Im going to use that pile of money to buy a German car or Japanese electronics, not the america products the poor family is going to by.

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avatar Toby

Overall, it is a good calculator even though I disagree with using the number of dependents on line 6c since that line can include dependents 17 and older. I think an easier way to figure out net income tax liability is to take line 10 on the 1040EZ, or lines 32+37 on the 1040A, or lines 52+57 on the 1040. Another problem I have with the calculator is that it always shows me a rebate of $0 if there is $0 tax liability, even though it should show at least $300 if earned income, social security, or veterans disability benefits is $3,000 or more. Here is an example from the IRS website.
1) Married couple with two children, wages of $4,000, no federal income tax liability before child tax credit.
Individual rebate is $600
Qualifying child credit is $600
TOTAL is $1,200
If I plug this into the calculator, it says the rebate is $0. Either the calculator needs work, or running IE7 with an adblocker on Vista is messing up the numbers.

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avatar Luke Landes ♦127,365 (Platinum)

Toby: When I enter the information you list, I get $1,200 as a result in both Firefox and IE. Also, if you scroll the calculator down, you’ll see that the instructions specify the age limit for dependents.

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avatar Toby

I just found something interesting. If I enter the information from my list and leave the net income tax liability blank, I get $1,200. If I enter $0 in net income tax liability, I get $0. I saw that the instructions specify age limits, I was just thinking of people who look at the calculator and enter the number from 6c without reading the instructions. Overall the calculator will spit out the right answer most of the time. I just noticed that in some scenarios you have to enter $0 into a field and in other scenarios, you have to leave certain fields blank to get the right answer.

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avatar Luke Landes ♦127,365 (Platinum)

Toby: Thanks, I’ll look into that.

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avatar Grandmother

My only income is Social Security and I was instructed, years ago by the IRS not to file a return anymore. So do I get any “refund” and do I have to file?

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avatar Helper

My brother is on SSI. He doesn’t files tax returns as he says he never owes or get any money back. He tells me thier are no taxes taken out if his SS checks. He makes about 12K a year via SSI and has no other income. Would it benefit him to file anyway this year? That is, would he get the economic stimulous check if he did or would this be opening a can of worms?

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avatar Helper

Correction, my brother is on SSDI, not SSI. That is, he paid into SS for years and was disabled and now using his SS disability benefit. Not SSI when someone never paid into it. Not sure if that makes a difference.

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avatar Toby

Good job on the calculator. The flaws I found with the zeroes and blanks seem to be gone. Just a couple more flaws I found. With Married Filing Jointly, if there is no earned income, no social security, and no veterans disability, the calculator gives a correct answer if AGI is $17,501 or above. If AGI is $17,500 or below the calculator says the rebate is equal to net income tax liability and doesn’t count $300 per child. Same thing single except that $14,101 or above gives the correct rebate and $14,100 or below gives an incorrect rebate. Here is an example.
4) Individual with no wages, no social security benefits, no veterans’ benefits, AGI is $10,000, federal income tax liability is $125.
Individual rebate is $300
Calculator says the rebate is $125. The way I understand it, even if your tax liability is only $1 and you have no earned income, social security, or veterans benefits you get $300 single or $600 married filing jointly plus $300 per kid under 17 unless your AGI is less than your standard deduction plus exemptions. Unless I’m missing something, if your AGI is less than your standard deduction plus exemptions, you shouldn’t even have $1 of tax liability. Anyways, the rebate will never be $125. If you correct this, your calculator will be pretty close to flawless.

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