Amended Returns Do Not Affect Stimulus Checks

Courtesy of David & Mary Mellem, EAs & Ashwaubenon Tax Professionals

IRS issued a press release (IR-2008-103) which addresses common errors and the Stimulus checks. Here are a couple of highlights.

Some taxpayers have filed two returns to make sure they get their check. IRS takes longer to try to figure out what to do with two returns, so it takes longer to determine if a check should be issued. Therefore anyone filing two returns will probably have their check delayed.

A change of address Form 8822 and a change of address card with the U.S. Postal Service should be completed when someone moves. If the U.S. Postal Service can’t deliver a check, it is returned to IRS. You may call the IRS at 1-866-234-2942 to provide your new address so that steps can be taken to have the check reissued.

It appears only 2007 returns filed by October 15th will get the advance checks. Those filing later appear to have to wait until their file their 2008 income tax returns in order to get the refundable credit (see below).

As expected, IRS will not use an amended tax return to calculate the amount of an Economic Stimulus Rebate Advance Check. IRS will process the amended return as a normal amended return.

And finally a reminder that anyone who doesn’t get an advance check during 2008 (based on their 2007 returns) may qualify for the credit on their 2008 income tax returns.

[Remember that the check received during 2008 is an Advance Check. The real refundable tax rebate is part of the 2008 income tax returns we will be preparing in a few months. Any amount the taxpayer already received during 2008 will reduce the tax rebate credit. In most cases taxpayers will receive no additional refundable credit since they have already received it during the 2008 year. Any taxpayer that is entitled to a rebate credit based on their 2008 income tax return that exceeds their advance check amount will receive the extra on their 2008 Form 1040 series. This includes any 2007 tax nonfilers. If a taxpayer receives an advance check that is higher than the amount they should have received based on their 2008 return information, there is NOT a requirement to pay it back.]

The worksheet for the 2008 income tax return credit line has not yet been released, but our mental image is quite simple:

1) What amount of rebate credit should you get based on your 2008 income tax return (filing status, qualifying dependents under age 17, income, etc.)?

2) What amount of advance check did you get (during 2008)? (It doesn’t matter why or how this amount was calculated, just how much it was.)

3) Subtract line (2) from line (1). The difference is the refundable rebate credit to be claimed on the 2008 income tax return.

The press release can be found at http://www.irs.gov/newsroom/article/0,,id=186599,00.html

Need help with a Federal tax issue? Ashwaubenon Tax Professionals (David & Mary) offer a fee based consulting services.

This text has been shared with you courtesy of: David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111) davidmellem@yahoo.com, marymellemea@yahoo.com, davidmellemea@yahoo.com, and marymellem@yahoo.com.

©2008 Ashwaubenon Tax Professionals. No reproduction of this article is permitted without the express consent of Ashwaubenon Tax Professionals, 2140 Holmgren Way, Suite 1040, Green Bay, WI 54304.

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