Four Tips to Help Taxpayers Avoid Errors on the Recovery Rebate Credit
Most of the nearly 119 million taxpayers who received the economic stimulus
payment last year will not be able to claim the recovery rebate credit on their
2008 federal income tax returns. A small number of taxpayers who did not
receive the full economic stimulus payment last year may be eligible to claim
the Recovery Rebate Credit on their 2008 federal income tax return. Figuring the
Recovery Rebate Credit incorrectly or entering inaccurate information will delay
the processing of your tax return and any refund due.
Below are the four things every taxpayer should know about this one-time
credit, which is related to last year’s Economic Stimulus Payment:
1. You do not have to pay back your Stimulus Payment and the payment
is not taxable.
2. Only a small number of taxpayers are eligible. The vast
majority of taxpayers are not eligible to receive the recovery rebate credit.
3. Did you have a major life
change? If so, you may be eligible to claim the Recovery Rebate Credit.
Some of the major factors that could qualify you for the Recovery Rebate Credit
1. Your financial situation changed dramatically from 2007 to 2008.
2. You did not file a 2007 tax return.
3. Your family gained an additional qualifying child in 2008.
4. You were claimed as a dependent on someone else’s return in 2007, but
cannot be claimed as dependent by someone else in 2008.
4. Any Recovery Rebate Credit amount will be included in your refund.
The IRS will figure the credit for you and include it in your refund or put it
toward any taxes owed.