MoneyLine by Neil Downing
Downing: Age affects rebates for children
01:00 AM EDT on Saturday, May 17, 2008
Q: I received my tax rebate on May 9, 2008. I was surprised to see that it was only for $600.
I filed as head-of-household, with one child. He was 17 years old at that time, but as of April 10, 2008, he turned 18. He does receive [benefits] from his father’s passing, but I claimed him on my return. Is there some way that I can rectify this, and, if so, how?
— K.D., Charlestown
A: There’s nothing you can do, unfortunately. Here’s the deal:
The rebates that the U.S. Treasury is in the middle of issuing this year are processed based on the information you provided on the return you filed earlier this year, the one covering 2007.
If you’re married and filed a joint return, you’re generally eligible for a maximum rebate of $1,200.
If you claimed another “filing status” on your 2007 federal income-tax return (such as single or head-of-household), you’re generally eligible for a maximum rebate of $600.
In either case, you may also receive an additional rebate amount of up to $300 per child. But to qualify for that additional amount, the child had to have been under 17 as of Dec. 31, 2007, said Deborah J. Hadden, former president of the Rhode Island Association of Enrolled Agents, which represents federally licensed tax practitioners.
In your question to MoneyLine, you indicated that your son was 17 as of Dec. 31, 2007. As a result, you aren’t eligible for the additional rebate amount for that child, said Hadden, owner of BRL Associates LLC, a tax-preparation firm based in Westerly.
The good news, though, is that you were eligible for the maximum rebate of $600 for someone who filed as head-of-household, and you received your rebate already.
Q: I neglected to put my children’s Social Security numbers on my return. When I phoned … I was told that I won’t receive the stimulus for my children, and there was not a form to send in to get that rebate. I was told I would have to file next year to get [the] rebate for my children. I was wondering if there was a way to expedite the process, make the correction, to get [the] rebate sooner.
—A.S., Tiverton
A: Federal income-tax returns undergo an extensive computerized check to make sure that Social Security numbers listed on the returns are accurate.
The IRS also checks to make sure there’s a match between a person listed on the return and the Social Security number entered on the return next to that person’s name.
If there are mismatches or other such errors, the return will probably be flagged for review and follow-up.
If you listed your children as dependents on your federal income-tax return, but didn’t include their Social Security numbers, odds are that the IRS won’t be able to complete the processing of the return — or of the rebate, said Internal Revenue Service spokeswoman Peggy Riley.
Instead, the IRS will probably mail you a notice, alerting you to the problem and asking you to resolve it.
If you’re unable to resolve the issue promptly, you probably won’t receive, this year, the additional rebate amount for each child you have who was under age 17 as of Dec. 31, 2007, she said.
If that’s the case, however, you’ll be able to claim a rebate-related credit on the return you file early next year, covering 2008.
In other words, if you don’t receive the additional rebate amount this year because of the Social Security number snafu, you’ll get another bite at the apple early next year, when you complete and file your 2008 return.
Q: I have a daughter who got a rebate of $600, and I have a sister-in-law who is retired and working part-time … and she only got $300. Could you tell me what the difference is between the two? Both are single, filing income tax as singles, but one got $600 and the other $300.
— S.S., Seekonk, Mass.
A: If you’re single, and have no young children, your rebate will probably be a minimum of $300, a maximum of $600, or somewhere in between, Riley said.
In your question to MoneyLine, you didn’t list your daughter’s income. However, in general, a single person who works full-time and has no young children is more likely to receive the maximum rebate of $600.
Also in general, a retiree with no young children is more likely to receive the minimum rebate of $300.
Why did your daughter receive a bigger rebate than your sister-in-law? Your daughter “probably had a higher income, so she had a higher tax liability,” Riley said in an interview at IRS regional headquarters in Boston.
(For more details about the calculation of rebates, please see tomorrow’s MoneyLine.)
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