In February 2008, Congress approved and the President signed H.R. 5140, a bipartisan econonomic stimulus bill that provides an unprecedented $66 billion in tax relief for over 130 million American working families, including millions of senior and disabled veteran households. Specifically, the economic stimulus package will provide a tax rebate of up to $600 per individual and $1,200 per married couple, plus an additional $300 per qualifying child. In our state of Massachusetts alone, approximately 2.9 million households will receive tax rebates, with an average tax rebate of $828 per household. Generally, in order to qualify for a payment, an individual must have earned income over $3000 (including Social Security and veterans benefits) and must file a 2007 tax return. (For additional information on the economic stimulus rebate, including rebate eligibility, please see "Frequently Asked Questions" below).

The economic stimulus package also takes additional steps towards bolstering our national economy, including measures designed to strengthen the housing market and safeguard hardworking Americans against the risk of foreclosure. Notably, in order to expand affordable mortgage loan opportunities for families at risk of foreclosure through the Federal Housing Administration, this legislation increases the loan limits for single family homes from Fannie Mae and Freddie Mac from $417,000 up to $729,750, covering loans made between July 31, 2007 and December 31, 2008.

Furthermore, the economic stimulus package includes provisions to promote small business investment and spur job growth. Specifically, the legislation doubles the amount that small businesses can immediately write off their taxes for capital investments made in 2008 from $125,000 to $250,000, for purchases of new equipment of up to $800,000 (up from $500,000). Additionally, the legislation provides immediate tax relief for all businesses to invest in new plants and equipment by accelerating depreciation provisions, thereby allowing firms to write off an additional 50% for investments purchased in 2008

Frequently Asked Questions Regarding Economic Stimulus Rebate

Am I eligible for a stimulus check?

Generally, you are eligible for a stimulus check if you file a 2007 income tax return reporting tax liability or have earned income, Social Security income, or Disabled Veterans’ Benefits over $3,000. If you are claimed as a dependent on someone else’s return, such as your parents’ return, you are not eligible. The credit phases out for those taxpayers with an adjusted gross income of $75,000 ($150,000 for a joint return) or more, generally at a rate of $50 per $1,000 of adjusted gross income above $75,000 ($150,000 for a joint return).

What do I need to file to receive a stimulus check?

Most taxpayers will simply need to file their 2007 income tax return, i.e., the stimilus check does not require you to fill out a separate form. The Treasury Department will determine the amount of the check based on your 2007 income tax return and will automatically send it to you. Please note that there are special filing instructions for recipients of Social Security, Railroad Retirement, and certain veterans’ benefits.

When will I receive my stimulus check?

The Treasury Department expects to begin issuance of stimulus checks to over 130 million American working families in May of 2008 and trhoughout the spring and early summer. Given that the amount of your check will be based on the information included in your 2007 income tax return, please note that your check will not be issued until you have filed your 2007 return and it has been processed. No checks will be issued after December 31, 2008.

What will be the amount of my stimulus check?

In order to assist you in calculating the amount of your stimulus check, the Treasury Department has placed an economic stimulus calculator on its website (http://www.irs.gov/app/espc/). Generally, taxpayers will receive a rebate check of $600 ($1,200 in the case of a joint return). Most taxpayers with $1 of income tax or $3,000 of qualifying income will be guaranteed a minimum of rebate check of $300 ($600 for a joint return). "Qualifying income" generally is the sum of an individual’s earned income, Railroad Retirement benefits, Social Security benefits, and veterans’ payments. In addition, a taxpayer is eligible for an additional $300 for each qualifying child.

Who is a qualifying child?

A qualifying child, for purposes of the stimulus check, generally is a child who was under age 17 at the end of 2007, did not provide over one-half of his or her own support, lived with you for more than one-half of 2007, and has a Social Security Number.

Is the stimulus check taxable?

No. This amount will not be included in your 2008 gross income. The stimulus check is an advance payment of an additional, new tax credit related to your 2008 income tax return.

How can I get more information?

The IRS will mail two informational notices to taxpayers alerting them to the stimulus payments. These letters will be sent to all households that filed income tax returns with the IRS last year and will remind taxpayers that they must file a 2007 tax return in order to qualify for a 2008 stimulus check. In addition, the IRS website (www.irs.gov) also contains information on the economic stimulus check.
The Volunteer Income Tax Assistance (VITA) program provides assistance to low-and moderate-income taxpayers. You can locate the nearest VITA site by calling 1-800-906-9887. As part of the IRS-sponsored Tax Counseling for the Elderly Program, AARP offers the free Tax-Aide counseling program (for individuals age 60 and older) at more than 7,000 sites nationwide during the filing season. To find an AARP Tax Aid site, you may call 1-888-227-7669 or visit the AARP website at www.aarp.org/money/taxaide/.