Recovery Rebate Credit (formerly the Economic Stimulus Check)

One of the questions I am getting the most with the beginning of tax season is: I didn’t file for 2007 or did not qualify for an economic stimulus check; did I just lose that free money?

The answer is, no. If you have not filed your 2007 return- or did not qualify for the stimulus check, you may still be eligible for the money for 2008. You may qualify for the Recovery Rebate Credit.

There are a number of reasons one may have not received the full amount of the stimulus check in addition to not filing a return. The IRS has some information regarding these questions, and I have provided my own examples below:

1. Last year I was in college and my parents claimed me as a dependent, now I am working full time and on my own, am I eligible?

Provided that you made less than $75,000 AGI (adjusted gross income), you should be eligible for the recovery rebate credit.

2. My husband and I received our full stimulus check last year and had a baby in 2008, do we get any additional money?

Yes. If you met the qualifications in 2007 and had a baby in 2008, you will receive the additional $300 for your new baby.

3. I only received $300 of my economic stimulus check, do I receive the other half this year?

Yes. Provided your income was similar to 2007, the IRS should issue the other $300 in 2008.

4. Last year my income was too high for the economic stimulus check, am I eligible for it this year?

If you income did not change, and you had no major life changes, you would not qualify for the recovery rebate credit. Also, if you already received the full economic stimulus check, you will not receive the recovery rebate credit. If you are not entitled to the credit, you are not alone. The recovery rebate credit is expected to impact a small minority of taxpayers. Per the IRS, of the 119 million people who received the economic stimulus check, most are not eligible for the recovery rebate credit.

So, how do you determine how much you are eligible for? You have two options. You can leave it blank and allow the IRS to calculate it for you or you can calculate it yourself as follows, provided you meet the eligibility test on page 62.

If you have had significant life changes (purchase a home, had a child, divorced, etc.)
it may be worth your while to contact a tax preparer.