Will The Stimulus Money Be Taxed?
Someone asked if the stimulus money that will be arriving next month will be taxed.
When you do your 2008 income tax return, you will be asked somewhere in the preparation process how much of an advance you got in 2008. (By the person doing your tax return, by the software program you are using, or if doing by hand, the instructions will have you enter it on a worksheet.) This is not in order to tax you on it. This is to calculate to see whether or not you got the full credit and, if not, you will get the remainder of it that is still due you when you file your 2008 return.
Some people who do not receive the stimulus funds now will get it when they file their 2008 tax return. You have to take into account what you did receive so that you are not getting it twice. On the other hand, maybe you end up getting more than you should have if it had waited until you filed the 2008 return and in that case, you do not have to pay any of it back. I am not sure exactly how this is all figured, but the child tax credit is increasing to $1300 (therefore you will get $300 for every dependent child on your 2007 tax return who will still be under age 16 by the end of 2008). If you cannot for some reason claim that child on your 2008 return you still get to keep the $300 you got for that dependent.
To sum it up, the stimulus check, is a one time tax credit just paid in advance. Your taxes for next year will not be affected.
Labels: Income Tax, Stimulus, taxes
Posted By: Joe on Thursday, April 24, 2008
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