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Today, February 28, 2008, NSTP participated in an IRS conference call updating information about the Economic Stimulus Payments. The information included:

1. Initial notices to taxpayers will be received by 130 million taxpayers beginning Monday, March 3, 2008.
   
   These notices will be sent to 2006 tax return filers over the next two weeks and all notices will be sent out by March 15, 2008. The notices are staggered in order that the IRS telephones and walk-in offices will not be overwhelmed.
   
   
2. The IRS will then generate additional notices for those taxpayers with Social Security, Veteran’s payments and Railroad benefits. These taxpayers will receive “mocked-up” 1040-A forms with blank forms. They will also receive a page of filing “tips”.
   
   All notices will be sent the week of March 17, 2008. The IRS anticipates 20 million notices to Social Security recipients and 3.5 million to VA recipients will be sent.

The IRS will be offering outreach activities and will be providing an Events Calendar on www.irs.gov.

On March 29, 2008, the IRS will be holding Super Saturday Stimulus Day where all IRS offices and phone lines will be open to assist taxpayers.

Taxpayers who normally file tax returns need to do nothing further. The IRS will calculate the Stimulus Rebate.

All other qualified taxpayers need only to file their 2007 Federal Income Tax Return in order to receive the Stimulus Rebate.

The IRS warns that “the Stimulus Rebate should not be confused with any 2007 Federal Income Tax Refund.

During the conference call, several questions were asked and responses by the IRS were offered which may clarify some additional questions regarding the Stimulus Package. They included:

Question:
When will checks be received and is there a schedule of who gets the rebates first?

Answer:
The first checks will be issued to taxpayers in early May 2008 – May 2, 2008 is the target date. These will be to taxpayers who have indicated a Direct Deposit on their 2007 Federal Income Tax Return.

Paper checks will then follow beginning on May 16, 2008.

The IRS anticipates that it will take eleven to twelve weeks for taxpayers to receive their checks.

The IRS is currently processing paper filed returns for the purpose of the Stimulus Package.

Question:
Can a taxpayer file a Stimulus Package return with no tax due and put their Direct Deposit information on the return in order that the Stimulus Payment will be automatically deposited into their bank account?

Answer:
The IRS offered the following:

1. Computer systems have been modified to allow non-refund returns to indicate the bank account and routing transit number of the taxpayer in order that the Stimulus Payment can be by Direct Deposit.
2. On original return filings where a RAL or RAC or Split Refunds occur a paper check will be issued.
3. On original return filings where there is no refund or a balance due, the taxpayer can indicate Direct Deposit information which will allow IRS to send the Stimulus Payment by Direct Deposit.

Question:
Is there a time limit on applying for the Stimulus Payment?

Answer:
The IRS will not process the Advanced Stimulus Payment for 2008 after December 31, 2008. This would indicate that the deadline for the Advanced Stimulus Payment filing of a 2007 Federal Income Tax Return is October 15, 2008 to allow IRS time to process the return and issue the Stimulus Payment.

Question:
So if a taxpayer does not file their 2007 Federal Income Tax Return until after October 15, 2008 they will not get the Stimulus Payment?

Answer:
They will not get the Advanced Stimulus Payment. The actual Stimulus Payment will be calculated on the 2008 Federal Income Tax Return and any Advance received will be deducted. If the taxpayer did not receive the Advanced Stimulus Payment then, if qualified, they will receive the payment on their 2008 Federal Income Tax Return.

The Advanced Stimulus Payment is not income on the 2008 Federal Income Tax Return.

Question:
Taxpayers who are in nursing homes, who will get their Stimulus Payment?

Answer:
The Stimulus Payment will go to the taxpayer at their address of record or to the legal representative or nursing home. The Stimulus Payment will go to whoever would normally receive the tax refund of the taxpayer.

Question:
Will the Stimulus Payment reduce any Medicaid or SSI benefits due the individual receiving the Stimulus Payment?

Answer:
No, the Act prohibits any reduction of government benefits by the receipt of the Stimulus Payment. It is to be disregarded as additional income or resources.

Question:
So the taxpayer does not qualify for the Advanced Stimulus Payment in 2008 because they made too much money in 2007. What if their income is less in 2008 and at the end of the year they would have qualified?

Answer:
The payments received during 2008 are the Advanced Stimulus Payments based upon the taxpayer’s filing of their 2007 Federal Income Tax Return. When the return is filed for 2008, in 2009, the Stimulus Rebate will be figured and any additional amount the taxpayer qualifies for will increase the refund or reduce the amount due on their 2008 Federal Income Tax Return.

Taxpayers who receive too much in the Advanced Stimulus Payment will not have to pay back the overage on their 2008 Tax Returns.

Question:
The Economic Stimulus Payment Notice specifically says “individuals cannot receive a payment if they can be claimed as a dependent of another taxpayer or they filed a 2007 Form 1040NR, 1040NR-EZ, 1040-PR, or 1040-SS. Will the IRS provide any further written guidance for Senior Taxpayers who are claimed by their children as dependents regarding their ineligibility for the Stimulus Rebate?

Question from NSTP Executive Director.

Answer:
No, the IRS has already printed the insert going to taxpayers – How to Determine Your Stimulus Payment – which does not address the issue of the Senior Taxpayer claimed as a dependent by someone else.

Question:
We understand that taxpayers are being advised to keep their Advanced Stimulus Payment notices to have for their tax preparers next filing season. Will the IRS have an accessible web site where tax professionals can access this information when taxpayers forget how much they have received?

Question from NSTP Executive Director.

Answer:
Due to your suggestion, the reprogramming is already taking place and we will have this available for next filing season. The IRS is currently dealing with the immediate, which is getting out the checks to stimulate the economy. We will be working on how this will play out for next season after checks are in the hands of taxpayers.

Question:
What about amended tax returns? When the taxpayer files an original 2007 return showing qualifications for the Advanced Rebate, receives the rebate and then amends the return which shows they did not qualify.

Answer:
The IRS has just now had regulations written regarding the amended return issue and will be publishing the guidance within the week.

For further information, the IRS directs tax professionals to www.irs.gov and the page on FAQs which are available.

Today, February 13, 2008, President George Bush signed a multibillion-dollar economic rescue package that means $300 to $1,200 for many American households.

Rebates are to go out beginning in May to taxpayers and low-income people, including seniors living off of Social Security and veterans who depend on disability checks.

Starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million individuals. The stimulus payments will out through the late spring and summer.

The vast majority of Americans who qualify for an economic stimulus payment will not have to do anything other than file their 2007 individual income tax return to receive their payment this year. They will not have to complete applications, file any extra forms or call the Internal Revenue Service to request the payment, which is automatic. The IRS will determine eligibility, figure the amount and issue the payment.

Stimulus payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Taxpayers who have already filed with direct deposit will not need to do anything else to receive the stimulus payment. For taxpayers who have not filed their 2007 returns yet, the IRS reminds them that direct deposit is the fastest way to get both regular refunds and stimulus payments.

The IRS will use the 2007 tax return to determine eligibility and calculate the basic amount of the payment. In most cases, the payment will equal the amount of tax liability on the return with a maximum amount of $600 for individuals ($1,200 for taxpayers who file a joint return) and a minimum of $300 for individuals ($600 for taxpayers who file a joint return).

Even those who have little or no tax liability may qualify for a minimum payment of $300 ($600 if filing a joint return) if their tax return reflects $3,000 or more in qualifying income. For the purpose of the stimulus payments, qualifying income consists of earned income such as wages and net self-employment income as well as Social Security or certain Railroad Retirement benefits and veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans’ Affairs in 2007. However, Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.

Low-income workers who have earned income above $3,000 but do not have a regular filing requirement must file a 2007 tax return to receive the minimum stimulus payment. Similarly, Social Security recipients, certain Railroad retirees, and those who receive the veterans’ benefits mentioned above must file a 2007 return in order to notify the IRS of their qualifying income.

The IRS emphasized that people with no filing requirement who turn in a tax return to qualify for the economic stimulus payment will not get a tax bill. People in this category will not owe money because of the stimulus payment.

To be eligible for a stimulus payment, taxpayers must have valid Social Security Numbers. Anyone who does not have a valid Social Security Number, including those who file using an Individual Taxpayer Identification Number (ITIN), an adoption Taxpayer Identification Number (ATIN), or any other identification number issued by the IRS is not eligible for this payment. Both individuals listed on a married filing jointly return must have valid Social Security Numbers to qualify for a stimulus payment.

Eligibility for the advance payment is subject to maximum income limits. The payment amount will be reduced by 5 percent of the amount of income in excess of $75,000 for individuals and $150,000 for those with a Married Filing Jointly filing status.

Individuals who pay no tax and who have less than $3,000 of qualifying income will not be eligible for the stimulus payment.

Parents and anyone else eligible for a stimulus payment will also receive an additional $300 for each qualifying child (subject to income phase-outs). To qualify, a child must be eligible under the Child Tax Credit and have a valid Social Security Number.

Anyone who is not eligible for the basic payment amount due to the phase-out provision or any other exception will not be eligible for this additional amount for children.

Individuals who receive Social Security benefits, Railroad Retirement benefits and certain veterans’ benefits may have to follow special filing requirements in order to receive the basic amount:

Individuals who receive Social Security benefits, Railroad Retirement benefits and certain veterans’ benefits may have to follow special filing requirements in order to receive the basic amount:

Those who have already filed a 2007 return reflecting qualifying income of $3,000 or more do not have any additional filing requirements and do not need to do anything more to receive their payment.

Those who have already filed a 2007 return showing less than $3,000 in qualifying income and did not list their Social Security, Railroad Retirement or certain veterans benefits should file a Form 1040X to list those non-taxable benefits and qualify for a payment.

Those who are not required to file a 2007 return but whose total qualifying income including Social Security, certain Railroad Retirement and certain Veterans benefits would equal or exceed $3,000 should file a return reporting these benefits on Line 14a of Form 1040A or Line 20a of Form 1040 to establish their eligibility. Please note the form lines just mention Social Security, but use these lines even if your only benefits were Railroad Retirement or veterans’ benefits.

Most taxpayers will receive two notices from the IRS. The first general notice from the IRS will explain the stimulus payment program. The second notice will confirm the recipients’ eligibility, the payment amount and the approximate time table for the payment. Taxpayers will need to save this notice to assist them when they prepare their 2008 tax return next year.

Anyone who moves after they have filed their 2007 tax return should notify the IRS by filing Form 8822, Change of Address, and also notify the Post Office.

Individuals who file Form 1040NR, 1040PR, or 1040SS are not eligible for the stimulus payments. These returns are normally filed by Nonresident Aliens, residents of Puerto Rico and residents of the U.S. Virgin Islands, Guam, American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI). Residents of U.S. possessions will be receiving their rebates directly from the possessions.

Also ineligible are individuals who can be claimed as dependents on someone else’s return.

Dividends, interest and capital gains income is not included when determining qualifying income. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment. Also not included in qualifying income are non-veterans or non-Social Security pension income (such as those from Individual Retirement Accounts).

Stimulus payments will be subject to offset against outstanding tax and non-tax liabilities in the same fashion as regular tax refunds.

In addition, the IRS emphasizes the stimulus payments will not count toward or negatively impact any other income-based government benefits, such as Social Security benefits, food stamps and other programs.

Some low-income workers and recipients of Social Security, certain veterans’ benefits and certain Railroad Retirement benefits may qualify for economic stimulus payments this year from the federal government.

In most cases, payments will range from $300 to $600 for individuals and $600 to $1,200 for joint filers. Taxpayers may receive $300 for each qualifying child.

Most taxpayers do not need to take any extra steps to receive the payment beginning in early May.

Individuals who might not otherwise be required to file a 2007 tax return will need to file a return this year to receive the stimulus payment. The return must show at least $3,000 in qualifying income.

In other words, low-income workers who had at least $3,000 in earned income in 2007 but do not otherwise earn enough to be required to file a federal tax return need to file a return in order to get the stimulus payment. Likewise, Social Security recipients, veterans and retired railroad workers who might not otherwise need to file a tax return must do so to receive the economic stimulus payment.

Normally, certain Social Security, Railroad Retirement benefits and certain veterans’ payments are not subject to income tax. However, the economic stimulus law passed in February contains a special provision allowing Social Security recipients and recipients of certain veterans’ benefits and certain Railroad Retirement benefits to count those benefits toward the qualifying income requirement of $3,000 and thereby qualify for the stimulus payment.

This means a taxpayer who had, for example, $500 in earned income and $2,500 in any combination of the benefits described above can count those benefit payments toward his or her qualifying income to reach the $3,000 earned income requirement, even though the individual would not otherwise owe taxes on such income.

For purposes of meeting the qualifying income requirement, the following benefits need to be reported in any combination on Line 20a of Form 1040 or Line 14a of the Form 1040A.

Social Security benefits reported on the 2007 Form 1099-SSA, which people would have received in January 2008. People who do not have a Form 1099 may estimate their annual Social Security benefit by taking their monthly benefit, multiplying it by the number of months during the year they received the benefits, and entering the number on Line 20a of Form 1040 or Line 14a of the Form 1040A.

Railroad Retirement benefits reported on the 2007 Form 1099-RRB, which recipients would have received in January 2008.

The sum of veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans’ Affairs in 2007. People are allowed to estimate their annual benefit by taking their monthly annual veterans’ benefit, multiplying it by the number of months during the year they received benefits, and entering the number on Line 20a of Form 1040 or Line 14a of the Form 1040A.

People should note that Line 20a of Form 1040 and Line 14a of the Form 1040A are designated for Social Security. To qualify for the economic stimulus payments, these lines should also be used to include any qualifying Railroad Retirement or veterans’ benefits.

Some recipients of the benefits described above may have filed a 2007 tax return reporting at least $3,000 in qualifying income. They do not need to do anything else. They will begin receiving their stimulus payments in early May.

Others may need to amend a previously filed tax return to include benefits to reach the $3,000 qualifying income level. Adding these benefits on an amended tax return will not increase an individual’s tax liability but will establish eligibility for the stimulus payment. Taxpayers can use IRS Form 1040X to amend a tax return in order to qualify for the stimulus payment.

The Internal Revenue Service today advised taxpayers that in most cases they will not have to do anything extra this year to get the economic stimulus payments beginning in May.

The IRS will begin sending taxpayers their payments in early May after the current tax season concludes. Payments to more than 130 million taxpayers will continue over several weeks during the spring and summer. A payment schedule for taxpayers will be announced in the near future

To accommodate taxpayers who file tax returns later in the year, the IRS will continue sending payments until December 31, 2008. The IRS also cautions taxpayers that if they file their 2007 tax return and then more their residence that they should file a change of address card with the U.S. Postal Service.

The IRS will mail two informational notices to taxpayers advising them of the stimulus payments. However, taxpayers should be alert for tax rebate scams such as telephone calls or emails claiming to be from the IRS and asking for sensitive financial information. The IRS will not call or email taxpayers about these payments nor will it ask for financial information. Scam emails and information about scam calls should be forwarded to phishing@irs.net