How will the 2008 tax rebates be repaid?

Question

Will they take it out of our federal tax return or will it be filed as earned income?

Answer 1

as per H & R Block web site

2. Then, will the tax rebate be considered income and will I be taxed on it next year on my 2008 return?

No and no. The tax rebate is an ADVANCE CREDIT for tax year 2008 and will be calculated on your 2008 return. If you're due a higher payment, you'll get the remainder next year when you file. If you received a higher rebate (payment) than you should have, you DO NOT have to pay it back.

Answer 2

Neither.  You won't repay it.

For 2008 there is a one-time tax cut for income in the 10% bracket - the rebate is an advance on that.  If your rebate is more than the tax cut would have given you, you don't have to pay back the extra.  so your refund next year will be the same as it would have been if there had been no stimulus bill (no tax cut, and no rebate).

But if you don't get a rebate this year and have any tax liability next year, or if your rebate this year is less than your tax liability next year and you haven't already gotten the maximum $600, then you'll benefit from the tax cut when you file your 2008 return.

What this means to you is that if you would normally have gotten $2000 next year and you got the rebate this year, you'll get $2000 next year.  If you did NOT get the rebate this year, and would have gotten $2000 next year, you will get MORE than $2000 next year if you owe any tax, because you'll also get the benefit of a one-year tax cut.  If you get the rebate this year, you won't get that extra, because you will have already gotten it.

Answer 3

you need to file it as income in april. so they can tax the tax rebate

Answer 4

Rebates don't come free.  They will be paid either by deficit spending or by increasing taxes to recover the money.

Answer 5

The rebate checks are basically an advance on your 2009 refund.  The amount received will be deducted from any monies due you on your 2009 form (for 2008 taxes).  The IRS will calculate what you should’ve gotten and adjust your return.

Answer 6

Judy said it.

The rebate is not counted as income and will not affect your refund or tax due.

And depending on your circumstances, if you didn't get the full rebate amount, you may be able to get the difference on your return next year.