Errors That Can Delay the Stimulus Payment

By: Shelia M. Whorton, MPA

The IRS has issued a list of the most common errors made by people awaiting their stimulus payment. One of the most frequent errors made are people filing more than one tax return for 2007. People should file only one tax return. That return will initiate the stimulus payment process in accordance to IRS guidelines. With the exception of retirees, veteran or other qualifying income, amended returns cannot be filed solely for the purpose of receiving an economic stimulus check. Amended returns are completed to correct income, deductions, and income tax.

The IRS also stated that some people are listing their monthly income instead of annual income. To be eligible for the minimum payment of $300.00 ($600.00 for married couples filing jointly), people must list their annual amount of qualifying income. In addition, the qualifying income must be at least $3,000.00 from earned income, combat pay, Social Security, Veterans Affairs and Railroad Retirement.

To be eligible, a person cannot be a dependent of another person. A valid social security number is required unless a spouse serves in the military. Supplemental Security Income does not count as qualifying income for stimulus payment purposes.

Generally people who have small amounts of, or no tax liability are getting less than they expected or none at all. The law provides for a maximum stimulus payment of $600 ($1,200 for married couples filing jointly), or an amount equal to a taxpayer’s tax liability, whichever is less. Tax liability is defined as the net amount of federal income taxes paid after deductions and credits. If people had not tax liability but had at least $3,000.00 in “qualifying income”, they would be eligible for $300.00 ($600.0 for married couples). There is also a $300.00 payment for each qualifying child.

People must use their most recent mailing address in order to receive timely payment. If a person has changed their address after filing their income tax, they should complete Form 8822 and a change of address card with the U.S. Postal Service. Undeliverable stimulus checks will be returned to the IRS.

The biggest error of all is not filing a 2007 tax return. Many people who normally would not file a tax return because of low or nontaxable income make this mistake. People in this category should use Form 1040A to ensure that they receive the stimulus payment.

In order to receive the payment this year, the tax return must be filed by October 15th. People who have already filed a 2007 tax return and have not received their stimulus payment are encouraged to visit the IRS web site, www.IRS.gov and select the “Where’s My Economic Stimulus Payment?” option to receive updated information regarding their stimulus payment. People who do not file s tax return by October 15th can still obtain their economic stimulus payment when they file their 2008 tax return. However, if they wait until next year, the amount of the payment will be based on 2008 income.

Shelia Whorton is Regional Director of Jackson Hewitt Tax Service