The government hopes the rebates will help stimulate the U.S. economy by providing additional cash for consumer spending.

If eligible, all you have to do to receive a check is file your 2007 tax return.

Checks will be mailed after returns are filed. If you extend your return, your rebate will be delayed. No rebates will be issued after December 31, 2008.

Rebate amounts and eligibility
Payment amounts will depend on several factors:

• Single taxpayers will receive a check for the amount of income tax paid in 2007 or $600, whichever is less.
• Married couples will receive a check for the amount of income tax paid in 2007 or $1,200, whichever is less.
• Taxpayers with a child under the age of 17 (claimed as a dependent) will receive an additional $300 per qualifying child.
• For lower income qualifying taxpayers, the minimum rebate amount is $300 per taxpayer, or $600 for joint returns.

All qualified taxpayers must submit a 2007 return to receive their rebate (even those not otherwise required to file).

Reduced or no rebate based on AGI
The rebate will be phased out for taxpayers whose adjusted gross income (AGI) exceeds $75,000 for individuals and $150,000 for joint returns.

Taxpayers with no children whose AGI is more than the following amounts will not receive a rebate:

• $87,000 (single)
• $174,000 (married)

Taxpayers with children have higher AGI limits before losing the rebate due to phase out.

Credit in 2008 compared to rebate in 2007
The rebate amount will ultimately be based on results from the 2008 Form 1040. Accordingly, the advance rebate paid to taxpayers in 2007 will need to be reconciled to the amount computed when preparing the 2008 Form 1040.

If the advance rebate paid in 2007 exceeds the computation based on the 2008 return, no repayment of the excess is required.

If, however, the advance rebate is less than the computation based on the 2008 return (e.g. if 2008 AGI is lower and the phase out is diminished), the taxpayer can claim the difference as a credit against the 2008 tax liability.

Business incentives
The stimulus package also includes one-year depreciation incentives for businesses.

For more information, contact us.