Is it true that we will have to pay back the stimulus check next year ?

Question

I was told only people that have to pay will be exempt anyone getting a return next year will have this years stimulus check deducted from next years return.

Answer 1

No, this is not true. There is no tax on the stimulus check and you will not have to pay it back next year.

Here's how that dumb rumor probably got started: It's true that if the government spends $40 million on stimulus checks, at some point the taxpayers will have to pay that amount back, with interest. That will be done in the form of very slightly higher taxes for everyone (unless the government decreases spending!) It increases the federal deficit, so eventually it will have to be "paid back."

But you will never have to write Uncle Sam a check for $300 to cover your 2008 stimulus check.

Answer 2

No, you were told wrong.

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 next year, because you will have already gotten it.

Answer 3

Untrue   Does not have to be repaid nor do you pay taxes on it.

Answer 4

No, Alex, that is a misunderstanding.  There will be a line on your 2008 return asking if you received the payment, and the amount.  This is not added to your taxable income; it's merely a tracking measure to see if all eligible taxpayers got the payment.  

  Confusing?  Yes.  Source of confusion:  Congress of the United States.