Tax question, software adding on stimulus refund for first time filer

My daughter just got her W2 and wanted to fill out her taxes. I got her signed up on TaxACT. I have used it for the last 5 years.

This is her first year filing her own taxes. The software is asking her the amount she got in the Stimulus check last year and she puts in zero which in turn adds on $300 to her refund.

I filed her as a dependent last year but did not get the extra $300 per child because as she was 17 years old before the years end.

I don’t believe she is eligible for the $300 the software is trying to tack on. Am I correct in this?

The only thing I could find was this statement on the IRS web site…

**Q. I don’t qualify for a stimulus payment based on my 2007 return. But my tax situation will be different in 2008. Will I qualify for any special benefit?

A. Possibly. The 2008 tax instructions will include a worksheet to help those who did not qualify for a payment or those who received a reduced amount determine if they can obtain a benefit when they file their 2008 tax returns next year. **

I don’t want the software to add the $300 and then it come back on her later and want that money back but I want to be clear that she is not eligible for it. I can’t seem to find “2008 tax instructions” that mention the stimulus check or extra benefits.

The IRS website states "If you missed the Oct. 15 deadline for filing an income tax return for a economic stimulus payment, don’t worry. You can receive a payment in 2009 by filing an income tax return when the filing season opens in January. The IRS will have more information shortly."

Does anyone have information on this type of thing? Maybe I should just have her wait another week or two when more information comes out. I was upset last year when the information about the stimulus came out weeks after I filed. If I had known about it I would not have filed my daughter on my taxes and had her file her own so she would have gotten the rebate. The way it worked last year I did not get it and neither did she.

I am not a tax lawyer or an accountant — just someone who doesn’t mind looking through 1040 instructions. It appears that the IRS is calling this the Recovery Rebate Credit, and in particular (bolding mine):

People who fall into the categories described below may be eligible for the recovery rebate credit this year:[ul][li]Individuals who did not receive an economic stimulus payment.[]Those who received less than the maximum economic stimulus payment in 2008 — $600 per taxpayer; $1,200 if married filing jointly — because their qualifying or gross income was either too high or too low.[]Families who gained an additional qualifying child in 2008.[]Individuals who could be claimed as a dependent on someone else’s tax return in 2007, but who cannot be claimed as a dependent on another return in 2008.[]Individuals who did not have a valid Social Security number in 2007 but who did receive one in 2008.[/ul][/li][/quote]
You can read the instructions for the 2008 Form 1040 (big-ass PDF) if you want to make double-sure that you’re doing things correctly. The description of the Recovery Rebate Credit is on p. 61, and there’s a worksheet you can fill out on pp. 62-63.

Holy Moly, Thanks! I will look into this more.

Just by a quick glance she should be eligible for $600 instead of the $300 the software was trying to add but I will do the worksheet for the 1040EZ form.

To add a bit more detail for those watching at home, it should be noted that the stimulus payment everyone received last year was a payment that was [and listen carefully here] intended to be qualified for based upon your 2008 tax situation, but was paid out as an estimate based upon your 2007 tax situation.

If someone DIDN’T get the payment because of their '07 filing situation, but are in fact entitled to it due to their '08 circumstances, it comes back to you in your tax refund for your '08 tax return.

If someone DID get a payment (for themselves or a kid or whatever) based on their '07 situation, but weren’t in fact entitled to it based on their '08 situation, the general rule is that they will not have to pay it back. Hard to believe, but that is my latest skinny from the IRS.

Why is that so hard to believe :wink:

Here’s a little more to add to the mix… you need to reduce your 2008 credit by the amount you were supposed to get last year before it was offset by amounts you might have owed the IRS.

Also there is a tool at the IRS site to tell you what you received last year. It doen’t seem to be working now though:

Works fine for me.

Righty-o. If you did not receive an actual check because it was impounded/garnished/taken to offset (whatever): past due child support, past taxes owed, past student loan debt, this is reported on your '08 tax return as if you received it.

I mean, you DID receive it, it was just forcibly taken from you to apply to something else.

I have heard that the IRS is not accepting any electronic filings until January 16th. Is that true? If so is there a reason for it?

According to MSNBC, it’s true. They don’t give an explanation.

The IRS hates a lot of amended returns and also hates sending out a lot of IRP/URP (income under-reporter) notices. Many dudes file their return without waiting for all their 1099/W-2’s, forgeting about some small amount. My advice is- you should not file until Feb 10th.

In addition to DrDeth’s observation, there is really nothing strange about this. Every year the IRS computers don’t typically go “live” to accept electronic filings until about mid-January. I’m sure there are a variety of reasons, including the fact that many commonly-used tax forms don’t have final approved versions issued until relatively late. I remember last year there were a couple really common forms that the IRS could not accept electronically until February 10th or so, so anyone who had a return using one of these forms literally could not electronically file (although they could paper file) before that date.

That makes sense. I have never filed mine until February because I don’t even get my W2 until the end of January.

I only realized they did not start right away because my daughter was filing this year and she got hers Tuesday.