How much do I get from the tax rebate plan?

On the rebate issue, if filing jointly but only one spouse worked, will that lower the amount you might get in the rebate?
— Larry C., Eau Claire, Wis.

No, rebates for married couples are based on a joint return. So if you and your spouse together earned $100,000 and paid more than $1,200 in taxes, you’ll get a rebate for $1,200 for your “individual” credits — even if one spouse earned a lot less than the other. If you and your spouse only paid $750 in taxes (less than the $1,200 rebate limit), you only get back $750.

So it seems that the most needy senior citizens who have income from Social Security only, income low enough so there is not income tax on it, will not get any help from this. Is that correct?
— A. F., Cleveland

No, seniors who collected $3,000 in benefits get the rebate — even if they paid no taxes. The tinkering by the Senate was due, in part, to concerns that some retirees and veterans would have been left out in the original plan. So if you had at least $3,000 of “earned income” in 2007, you get a rebate.

(Earned income as defined by the IRS normally would have excluded Social Security benefits; for rebate purposes, Social Security and veterans’ benefits are now back in.) In general, earned income includes wages, salaries, and tips; union strike benefits; long-term disability benefits before retirement age; earnings from self-employment; and combat pay. Income that’s not considered “earned” includes interest and dividends, pensions, unemployment benefits, alimony and child support.

Do we have to pay the rebate checks back?
— Bobby T., address withheld

No, these payments are not treated as taxable income, according to the Treasury spokesperson. They’re yours to keep. Actually, the government wants you to spend them. Some economists who are skeptical of the plan’s impact believe that many people will, in fact, stash them away in a savings account or use them to pay off credit card bills. Neither of those uses will stimulate the economy they way the plan is intended to. But in an election year, no one seems to mind.

There’s one more wrinkle, which we saved for last because it doesn’t look like you’ll really have to worry about it. Technically, these are rebates against your 2008 income — even though they’re being paid out to anyone who files a return for 2007 and meets the eligibility guidelines. So what happens if you don’t meet the guidelines for 2007, but you do meet them in 2008?

In that case, says a Treasury spokesperson, you’ll get the rebate next year. If you got more than you should have — because you qualified for more in 2007 that you do for the 2008 return — you’ll get to keep the extra money.

Depending on when you file your return, you should get your check sometime between May and early July.

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