Confusion about the IRS Stimulus Payment we all rec'd

jlvjr16 · Jan 14, 2009

A fellow co-worker of mine who has been doing taxes for the past 14 years stated that while filing a tax return for one of her clients, the tax software asked for the amount of stimulus payment one received in year 2008. As a result, her client's refund was reduced. She stated that the stimulus payment was just a loan to people who did their taxes.

Their was a news report on this issue too.

However, I did some research upon this and told her that it's not taxable nor reportable according to the IRS' website:
What is it? It's an economic stimulus payment that more than 124 million households will receive. It's not taxable, and it won't reduce your 2007 or 2008 refund or increase the amount you owe when you file your 2008 return. Payments started in May and will continue through the end of 2008.

Of course, no one would listen to someone who has never filed a tax return. That's why this year I will work for a tax firm in NYC.

Viking4Alpha · Jan 14, 2009

Jeez... I wonder what that's all about. "Taxing a stimulus"... kinda defeats the purpose I would think.

Pete14Rose · Jan 14, 2009

I certainly will not be filling in where they ask how much the stimulus is. They want to argue and try and deduct it, I will show them that line directly from their site and it not being reportable or taxable.

jlvjr16 · Jan 14, 2009

Pete14Rose said:
I certainly will not be filling in where they ask how much the stimulus is. They want to argue and try and deduct it, I will show them that line directly from their site and it not being reportable or taxable.

that's the same thing that I said.

The_ReverendAct2 · Jan 14, 2009

i wont be worrying about this since no check made it to my mailbox.

darrend505 · Jan 14, 2009

The Library of Congress has this to say:

http://thomas.loc.gov/cgi-bin/query/D?c ... 110NC4m5K::

The actual name is: "Family Economic Stimulus Act of 2008"

And it is catorigorized as: "Advance Refunds of Credit Based on Prior Year Data"

Eligible Individuals:

`(d) Eligible Individual- For purposes of this section, the term `eligible individual' means any individual other than--

`(1) any estate or trust,

`(2) any nonresident alien individual, and

`(3) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins.

Pete14Rose · Jan 14, 2009

jlvjr16,

You sure their refund wasn't reduced for another reason?

I just got off the phone with the place here in town that does our taxes, they said that last years Stimulus is not taxable....but added that they just need to know how much it was (which I find suspicious because they should already know and I shouldn't have to put it down on this years taxes).

ru4scuba · Jan 14, 2009

I wish "we all rec'd" it. :|

Guest · Jan 14, 2009

This at times can be treated like your unemployment benefits, if you have received any unemployment
benefits you claim that as income obliviously and you have to pay taxes on it.
I think every year the federal form ask you what was your state refund if you got one correct.
I can't remember if that is so, because I don't do my taxes my sis in law does them for us.
As well as she handles all of our Tax and Financial affairs.

I'll check with my sister in law about the stimulus benefit.

George K · Jan 14, 2009

I remember mentioning this to you guys on the Beckett board. Those things always have to be reported on one's taxes. There really is no such thing as tax-free these days.

jlvjr16 · Jan 14, 2009

George K said:
I remember mentioning this to you guys on the Beckett board. Those things always have to be reported on one's taxes. There really is no such thing as tax-free these days.

hmmmm.....even thought the IRS states it's not taxable...

confusion continues. Whatever it is, If my tax preparer bugs me about this once I receive my W-2 form, I will not release it. If he/she resists from doing my taxes, I'll do it on my own for free and use the $$$ that I was going to pay the Tax preparer to help build my Freddie Freeman collection.

ccouch (Chad) · Jan 14, 2009

I was hoping that somebody would step in and straighten out the confusion, but since nobody has, I'll lift my self-imposed ban from posting on this board.

Tax software packages and/or tax return preparers will ask for this amount NOT to include it in your taxable income or reduce your refund, but to calculate POTENTIAL FURTHER REBATES THAT MAY BE DUE TO YOU IN YOUR REFUND.

The amount of the stimulus that was paid to you was a "pre-payment" based on your 2007 tax return (hence the reason that you had to have filed the 2007 return to receive the payment). However, the legislation states that the true calculation of what is due to you is based on your 2008 return. So, what basically happens on the 2008 return is a true-up of your stimulus payment. What is important to note is that you won't owe anything back if the amount due to you turns out to be less than what you received. HOWEVER, if the amount calculated turns out to be MORE than what you received in 2008, then you will get that additional benefit in your refund.

And for the record, I do this for a living. I know what I'm talking about.

Tomlinson21RB · Jan 14, 2009

ccouch (Chad) said:
I was hoping that somebody would step in and straighten out the confusion, but since nobody has, I'll lift my self-imposed ban from posting on this board.

Tax software packages will ask for this amount NOT to include it in your taxable income or reduce your refund, but to calculate POTENTIAL FURTHER REBATES THAT MAY BE DUE TO YOU IN YOUR REFUND.

The amount of the stimulus that was paid to you was a "pre-payment" based on your 2007 tax return (hence the reason that you had to have filed the 2007 return to receive the payment). However, the legislation states that the true calculation of what is due to you is based on your 2008 return. So, what basically happens on the 2008 return is a true-up of your stimulus payment. What is important to note is that you won't owe anything back if the amount due to you turns out to be less than what you received. HOWEVER, if the amount calculated turns out to be MORE than what you received in 2008, then you will get that additional benefit in your refund.

And for the record, I do this for a living. I know what I'm talking about.

Great answer!

also, why the self-imposed ban on posting?

ru4scuba · Jan 14, 2009

ccouch (Chad) said:
I was hoping that somebody would step in and straighten out the confusion, but since nobody has, I'll lift my self-imposed ban from posting on this board.

Will you ban me, please?

cgilmo · Jan 14, 2009

why the self imposed ban?

Pete14Rose · Jan 14, 2009

ccouch (Chad) said:
I was hoping that somebody would step in and straighten out the confusion, but since nobody has, I'll lift my self-imposed ban from posting on this board.

Tax software packages and/or tax return preparers will ask for this amount NOT to include it in your taxable income or reduce your refund, but to calculate POTENTIAL FURTHER REBATES THAT MAY BE DUE TO YOU IN YOUR REFUND.

The amount of the stimulus that was paid to you was a "pre-payment" based on your 2007 tax return (hence the reason that you had to have filed the 2007 return to receive the payment). However, the legislation states that the true calculation of what is due to you is based on your 2008 return. So, what basically happens on the 2008 return is a true-up of your stimulus payment. What is important to note is that you won't owe anything back if the amount due to you turns out to be less than what you received. HOWEVER, if the amount calculated turns out to be MORE than what you received in 2008, then you will get that additional benefit in your refund.

And for the record, I do this for a living. I know what I'm talking about.

Thank you Chad, I just found similar info and was going to post it but I found it on Yahoo Questions and didn't want to post from an unreliable source.

I found this...

Your 2008 tax return includes a Recovery Rebate Credit. The credit is figured the same way the stimulus payment was figured but is based on your 2008 income instead of your 2007 income. In order to figure your Recovery Rebate Credit, you will need to know your stimulus payment. If your stimulus payment is different from the Recovery Rebate Credit, you will need to figure the difference. You are paid the difference if the RRC is more than your stimulus payment. You do not have to pay back the difference if your RRC is less than your stimulus payment.

So you will need to include the stimulus payment information on your tax return.

However, neither the stimulus payment nor the Recovery Rebate Credit are taxable. They are both tax-free.

Craig - 21hawk · Jan 14, 2009

ru4scuba said:
ccouch (Chad) said:

I was hoping that somebody would step in and straighten out the confusion, but since nobody has, I'll lift my self-imposed ban from posting on this board.

Click to expand...

Will you ban me, please?

I've now banned you, and because I'm a lawyer it counts.

Nice to see you Chad.

Craig

ru4scuba · Jan 14, 2009

Craig - 21hawk said:
ru4scuba said:

[quote="ccouch (Chad)":lb5d8wuu]I was hoping that somebody would step in and straighten out the confusion, but since nobody has, I'll lift my self-imposed ban from posting on this board.

Click to expand...

Will you ban me, please?

I've now banned you, and because I'm a lawyer it counts.

Nice to see you Chad.

Craig[/quote:lb5d8wuu]

Your Canadian laws don't apply to me.

George K · Jan 14, 2009

In the years prior, whenever a stimulus or "advance credit" check was given [like the check Bush gave out during his first year in power]... it was reported on your tax and deducted from your tax refund if you qualified for one. My brother is an accountant and I worked with him the first time this happened and it let to a lot of confusion. In a year's time, there would be customers who forgot to report their "advance credit" check or stimulus and would have to pay for it later when the IRS reported it for them.

Guest · Jan 14, 2009

ru4scuba said:
Craig - 21hawk said:

ru4scuba said:

[quote="ccouch (Chad)":jbbta2wz]I was hoping that somebody would step in and straighten out the confusion, but since nobody has, I'll lift my self-imposed ban from posting on this board.

Click to expand...

Will you ban me, please?

Click to expand...

I've now banned you, and because I'm a lawyer it counts.

Nice to see you Chad.

Craig

Your Canadian laws don't apply to me.[/quote:jbbta2wz]
Or even to Canadians as well. lol

Welcome to our community

Be apart of something great, join today!

Confusion about the IRS Stimulus Payment we all rec'd

New member

New member

New member

New member

New member

New member

New member

New member

Guest

Guest

Well-known member

New member

Member

Active member

New member

Well-known member

New member

New member

New member

Well-known member

Guest

Guest

Similar threads

Log in