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Title: IRS Package 1040A-3 - www.irs.gov/pub/irs-pdf/k1040a3.pd


1
Economic Stimulus Act of 2008
Helping Qualified Individuals Receive Their
Economic Stimulus Payments
National Affordable Housing Preservation
Associates Webinar April 24, 2008
2
Economic Stimulus Payments
  • What Is The Economic Stimulus Act?
  • Congress passed the President signed the
    Economic Stimulus Act in January 2008
  • 130 Million American Households will Receive
    Economic Stimulus Payments Beginning May 2008
    Continuing through 2008

3
Economic Stimulus Payments
  • Who is Eligible for an Economic

    Stimulus Payment?
  • Individuals with a Valid Social Security Number
  • Individuals who File a 2007 Individual Tax
    Return with
  • a Net Tax Liability, or
  • at Least 3,000 of Earned Income and/or
    Qualifying Income

4
Economic Stimulus Payments
  • Who is Eligible for an Economic Stimulus
    Payment?
  • Must Not be Claimed as a Dependent on Someones
    Else Tax Return in 2007
  • The Economic Stimulus Payment for Taxpayers with
    Income in Excess of 75,000 (Single Taxpayers)
    150,000 (Married Filing Joint Taxpayers) is
    Subject to Phase-out

5
Economic Stimulus Payments
  • What is Qualifying Income?
  • Earned Income (Wages or Net Self Employment
    Income)
  • Earned Income Does Not Include Dividends,
    Interest, Capital Gains or Other Passive Income
    Sources (Such as Rental Properties)

6
Economic Stimulus Payments
  • What is Qualifying Income? (Cont)
  • Social Security Benefits Reported on Form
    1099-SSA
  • Supplemental Security Income (SSI) is Not
    Qualifying Income
  • Railroad Retirement Benefits Reported on Form
    1099-RBB

7
Economic Stimulus Payments
  • What is Qualifying Income? (Cont)
  • Veterans Disability Compensation, Pension or
    Survivors Benefits Received from the Department
    of Veterans Affairs (VA)

8
Economic Stimulus Payments
  • How Much are the Economic Stimulus Payments?
  • Minimum of 300 (600 For Married Filing
    Jointly) with a Net Tax Liability or Qualifying
    Income of at Least 3,000
  • Maximum of 600 (1,200 For Married Filing
    Jointly)
  • Additional 300 for Each Qualifying Child

9
Economic Stimulus Payments
  • Who is a Qualifying Child?
  • A Child who is Under Age 17 as of December 31,
    2007
  • A Child with a Valid Social Security Number
  • A Child who cannot be Claimed as a Dependent on
    Another Tax Return
  • A Child who meets the Eligibility for the Child
    Tax Credit

10
Economic Stimulus Payments
  • How Does an Individual Receive an Economic
    Stimulus Payment?
  • File a 2007 Tax Return by the Due Date of
    October 15, 2008
  • The IRS will make the Determination of the Exact
    Amount of Economic Stimulus Payment from the 2007
    Tax Return Filed

11
Economic Stimulus Payments
  • What If an Individual Does Not Have a Tax Filing
    Requirement?
  • Some Individuals do not have a Legal Filing
    Requirement
  • Have Income which is not Taxable (Social
    Security Or VA Benefits)
  • Have Taxable Income that Results in No Tax
    Liability (Less than Standard Deduction And
    Exemption Amounts)

12
Economic Stimulus Payments
  • What If an Individual Does Not Have a Tax Filing
    Requirement?
  • Regardless of an Individuals Legal Filing
    Requirement for 2007 or any year, in order to
    Receive an Economic Stimulus Payment they must
    File a 2007 Tax Return. Includes
  • Social Security Recipients
  • Railroad Retirement Recipients
  • VA Benefit Recipients

13
Economic Stimulus Payments
  • What If an Individual Does Not Have a Tax
    Filing Requirement? Is there a Simplified Method
    for Filing in 2007?
  • For Individuals with Qualifying Income for an
    Economic Stimulus Payment and No Other Filing
    Requirements, they may file a Form 1040A With
    Minimal Entries For 2007

14
Economic Stimulus Payments
  • Impact on other Federal Benefits
  • Receipt of an Economic Stimulus Payment will Not
    affect the Eligibility or Amount of Needs Based
    Federal Benefit Programs (I.E. Food Stamps,
    Medicaid, Etc.)
  • Will Not Count as Income in Month Received
  • Will Only be Considered as a Resource 60 Days
    after the Month it was Received

15
Economic Stimulus Payments
  • Impact on 2008 Federal Tax Return
  • Stimulus Payments are Not Taxable
  • Taxpayers will Not Owe Tax on their Stimulus
    Payment in 2008
  • Stimulus Payments will Not Reduce or Increase a
    Taxpayers Refund in 2008
  • Individuals who do Not Qualify for an Economic
    Stimulus Payment based on their 2007 Return May
    Qualify for a Special Benefit on their 2008 Return

16
Economic Stimulus Payments
  • Economic Stimulus Payments Federal Tax Offsets
  • Economic Stimulus Payments are Subject to Offset
    for Outstanding Tax and Non-tax Liabilities in
    the Same Fashion as Regular Tax Refunds
  • If an Offset Occurs, Taxpayer will Receive a
    Letter explaining how the Stimulus Payment was
    Applied

17
Economic Stimulus Payments
  • Economic Stimulus Payments
  • Economic Stimulus Payments will be Direct
    Deposited if Taxpayer requested Direct Deposit on
    their 2007 Tax Return
  • Economic Stimulus Payments will be Mailed to
    Taxpayers who
  • Requested a Split Refund
  • Requested a Refund Anticipation Loan

18
Economic Stimulus Payments
  • Economic Stimulus Notices
  • IRS will send Notice to all Taxpayers who filed
    a 2006 Tax Return in Early March informing them
    about the Economic Stimulus Payments
  • IRS will send a Special Notice in Late March
    (including an Information Guide, Form 1040A,
    Mailing Envelope) to SSA, RRB VA Beneficiaries
    who did not File a 2006 Tax Return

19
Economic Stimulus Payments
  • Economic Stimulus Notices
  • Each Recipient of an Economic Stimulus Payment
    will Receive a Second Notice from IRS around the
    Time of the Economic Stimulus Payment informing
    them of the Amount of the Economic Stimulus they
    will be Receiving

20
Economic Stimulus Payments
  • Economic Stimulus Notices Scams
  • Please be aware of potential scams
  • The IRS will not
  • Go Door-to- Door
  • Make Outbound Phone Calls
  • Send e-mails
  • Will never ask for credit card information

21
Economic Stimulus Payments
  • Economic Stimulus Payment Dates
  • Payments will Start in May will Continue
    throughout the Summer based on a soon to be
    released Schedule
  • Initial Schedule will be based on the Last Two
    Digits of Taxpayers Social Security Number
  • By Law, Final Payments Must Be Made by December
    31, 2008

22
Economic Stimulus Payments
  • Economic Stimulus Payment Dates
  • For Returns Filed By April 15, 2008
  • Direct Deposits will start the week of May 2nd
    and be completed by the week of May 16th
  • Paper checks will start the week of May 16th and
    completed by week of July 11th
  • For Returns Filed After April 15th, ESP willed
    about two weeks after their refund but not before
    July 11th

23
Economic Stimulus Payments
  • Economic Stimulus Amended Returns
  • If a Taxpayer has already filed their 2007 Tax
    Return did not include 3,000 of Qualifying
    Income because they did not include the
    Non-taxable Income such as SSA/VA Benefits, that
    Taxpayer will need to file an Amended Return,
    Form 1040X, to Report the additional Qualifying
    Income.

24
Economic Stimulus Payments
  • Economic Stimulus Filing Dates
  • Initial Payment Schedule will impact returns
    Filed by April 15th
  • Filing Deadline for 2007 Tax Returns is October
    15, 2008

25
Economic Stimulus Payments
  • How Can You Help
  • Provide educational information to your
    residents
  • Provide access to forms necessary to file for an
    ESP payment (Form 1040A, IRS Package 1040A3)
  • Hold ESP Filing Seminars at Your Properties
    Where Assistance Could Be Provided to Potential
    ESP Recipients

26
Economic Stimulus Payments
  • How Can You Help ESP Filing Seminars
  • Most Potential ESP Recipients Who Have Not Filed
    to Date Need Face-to-Face Assistance
  • Fear/Confusion Regarding Taxes
  • Lack of Understanding of What is Required

27
Economic Stimulus Payments
  • How Can You Help ESP Filing Seminars
  • Plan Workshops in Your Facilities
  • Provide Direct Assistance (Facilities Manager
    Volunteers Who Will Help Complete the Return)
  • Self-Help Assistance (Volunteer Helps a Group of
    Individuals File Returns as Same Time)

28
Economic Stimulus Payments
  • How Can You Help ESP Filing Seminars
  • Minimal Training Required to Prepare Simple ESP
    Returns
  • IRS Publication 4665 - www.irs.gov/pub/irs-pdf/p4
    665.pdf
  • IRS Package 1040A-3 - www.irs.gov/pub/irs-pdf/k10
    40a3.pdf
  • NCOA/AARP Online Tool www.stimulus2008.benefits
    checkup.org/espp/welcome

29
Economic Stimulus Payments
  • How Does an Individual File a Simple Form 1040A
    to Qualify for an Economic Stimulus Payment on a
    Paper Return?
  • Secure an IRS Form 1040A
  • Write ECONOMIC STIMULUS Across the Top of the
    Form 1040A
  • Write in Taxpayers Name, Address and Social
    Security Number in the Appropriate Boxes

30
Economic Stimulus Payments
  • How Does an Individual File a Simple Form 1040A
    to Qualify for an Economic Stimulus Payment on a
    Paper Return? (Cont)
  • Check the Filing Status that Applies to the
    Taxpayer
  • Input Taxpayers Earned Income (Wages Net Self
    Employment Income Less Than 400) on Line 7

31
Economic Stimulus Payments
  • How Does an Individual File a Simple Form 1040A
    to Qualify for an Economic Stimulus Payment on a
    Paper Return? (Cont)
  • Input Taxpayers Social Security (Form
    SSA-1099), Tier 1 Railroad Retirement (Form
    1099-RBB), and/or Veterans Disability /or Death
    Benefits on Line 14a
  • If Exact Amount is Not Known, Use Estimate Based
    on Monthly Benefit

32
Economic Stimulus Payments
  • How Does an Individual File a Simple Form 1040A
    to Qualify for an Economic Stimulus Payment on a
    Paper Return? (Cont)
  • Input Amount of Non-taxable Combat Pay on Line
    40b
  • For Taxpayers Wanting Direct Deposit, need to
    Complete Lines 44b through 44d with Bank
    Information
  • Sign Return and Mail to IRS

33
Economic Stimulus Payments
  • Economic Stimulus Information Marketing
    Materials
  • For Latest Information, please visit the
    Official IRS Website at www.irs.gov to view up
    to the minute Frequently Asked Questions Section.
  • From irs.gov Economic Stimulus Information
    Center, click on the Link to Marketing Products
    For Partners to Locate Various Marketing
    Outreach Tools

34
Economic Stimulus Payments
  • Economic Stimulus Information Marketing
    Materials
  • Key Materials Available
  • One Page Flyers for SSA, VA, RRB Low-income
    Recipients
  • Sample 1040A
  • Envelope Stuffers
  • Radio Public Service Announcements

35
Economic Stimulus Payments
For More Information on Economic Stimulus
Payments, Please Visit www.irs.gov Click on
Rebate Questions on the Home Page or Call IRS
Hotline at 1-866-234-2942
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