Correction to the above question.....if I file my 2008 taxes in 2010 (late), am I still eligible for the stimulus package?

This post refers to the first economic stimulus package of 2008. You can read about the second stimulus package here. Looks like the stimulus payments will be sent out ahead of schedule, with the 800,000 direct deposit payments on Monday April 28th, Tuesday, Wednesday, and a whopping 5 million on Friday (none on Thursday).

The schedule of payments will follow the original schedule, just accelerated by a week. No doubt you’ve heard the “great” news that a deal on a stimulus package has been reached and that checks will be in the mail as early as May. Whether you believe the naysayers that say we’re really just propping up the Chinese economy (or oil rich nations) because we’re borrowing from them to buy their goods or whether you believe the proponents that say this will boost own economy in magical ways the fact of the matter is a deal has been reached – so what is it?

Essentially, it’s a removal of the 10% tax bracket for everyone with some modifications. It includes phaseouts that begin past annual incomes of $75,000 and a component that includes those working Americans that don’t earn enough to pay income taxes. To get a clearer understanding of the rules, let’s walk up the income levels and explain how it works; beginning first with those filing their taxes as singles and then adding in families.

How the phaseouts work, from what I can understand, is that you first determine eligibility (if you earned more than $3,000 and paid taxes) and then, if you fall in to the phaseout, start reducing your benefit. If you earned less than $3,000 – unfortunately you’d get nothing. If you earned more than $3,000 but paid no taxes, you’d get $300.

If you earned more than $3,000 and paid taxes, you get $600. If you have children, add $300 per. The phaseout levels begin at $75k and end at $87k, at a reduction of 5% per $1,000 over the lower limit.

If you earn above $87k, you’re over and thus get nothing regardless of the math. If you earned less than $3,000 – unfortunately you’d get nothing. If you earned more than $3,000 but paid no taxes, you’d get $600.

If you earned more than $3,000 and paid taxes, you get $1,200. If you have children, add $300 per. The phaseout levels begin at $150k and end at $174, at a reduction of 5% per $1,000 over the lower limit.

If you earned above $174k, you’re over and thus get nothing regardless of the math. An individual with $2,500 in earned income in 2007: Disqualified because income fell below the $3,000 threshold. A married couple with no children, with adjusted gross income of $100,000 in 2007: Would qualify for the full $1,200 couples.