Individuals earning 3,000 to 75,000 a year get a rebate of 300 to 600 dollars. For families making up to 150,000 annually, your rebate could be up to 1,200 dollars, plus an extra 300 for each child under 17. But how exactly will the rebates affect taxpayers like you?
Rebate checks are coming as early as May for millions of Americans. It's an effort to boost a slumped economy, even though a new government report released Wednesday showed an increase in January retail sales.
"I thank the members for acting quickly," said President George W. Bush Wednesday. "I thank them for providing immediate tax relief for the American people."
Yet many are skeptical.
"Anytime something's free, there's usually a catch," said H&R Block senior tax advisor Janice Manley.
Will this rebate cut out of next year's refund? Turns out answers are not easy to find. We contacted the local IRS and tax advisors, but they said the guidelines are just coming in since the bill was signed Wednesday. Now the last time we saw something like this was in 2001.
"The last time we did this, you did have to off-set your refund by the money you received in June," said Manley. "So if you're planning on your vacation money being your refund in 2009 with your 2008 taxes, remember that you're going to have to set aside the difference or not anticipate having as big a refund next year."
However, a spokesman with the Treasury Department said no one will be penalized or have to pay back the rebates. Here's why: think of it as a one-time advance. Instead of waiting until next year, the government is giving you a tax cut now, in the form of the rebates. If, when you file next year, it turns out you would have qualified for a larger rebate, you will be paid the difference. If you would have qualified for a smaller rebate, you still get to keep it. But here's the key: you must file your '07 return in time, otherwise don't expect a rebate at all.
Taxpayers can expect two notices from the IRS concerning rebate payments. And you can read more about this by looking under "Know More On 7," then click on the story "tax rebate 2008."