Tuesday, January 27, 2009

Recovery Rebate Credit - Getting 2008 Tax Rebate Information

For 2008 tax returns, it is necessary to know the amount of the tax rebate received in 2008. While the amount received is not taxable, it will be used to determine if any additional rebate money is due. This is because the money received in 2008 was actually an advance of the 2008 tax return rebate. Thus, if a taxpayer qualifies for a higher rebate based on his 2008 tax return, the additional amount will be given. For reference, one common reason for a higher rebate will be a child being born in 2008.

The amount already received is used to calculate the recovery rebate credit (1040 line 70, 1040A line 42, 1040EZ line 9) on the 2008 tax return. If you have Notice 1378 from the IRS, it will have the 2008 rebate already received. If you have misplaced the notice, the IRS has provided a helpful website How Much Was My Stimulus Payment? that will retrieve the information, by entering the taxpayers social security number, filing status and number of exemptions for the 2007 return.

With the correct information entered, the website will provide the appropriate rebate amount to be used in the Recovery Rebate Credit Worksheet. According to Questions and Answers about the Recovery Rebate Credit, the IRS will also calculate the credit for taxpayers who enter "recovery rebate credit" next to line 70 on form 1040, line 42 on from 1040A, and line 9 on form 1040EZ.

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This is not financial or tax advice. Please consult a professional advisor.

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