May 22, 2008

Q & A: More on Rebate Issues for Children

QUESTION: My husband and I got the stimulus rebate for the amount of $1200. Great. We have a 20 year old daughter who we did not receive any money for because she is over the age of 16. I understand that, although she certainly cost us plenty (college). I expected that she would receive the individual payment of $600 because she made over $3000 and filed a tax return. Here is the catch-22: She does not qualify for a rebate because we claim her as a dependent. Huh? We don't get any money for a dependent child; but she can't get a rebate as an individual taxpayer. Can you decode this?

ANSWER: This issue has been a popular source of questions (and comments) from our readers. Under the IRS rules, if an individual was eligible to be claimed on someone else's 2007 tax return, no stimulus rebate will be made. This includes a full-time student who could be claimed on the parent's return. This issue is addressed on the IRS web site at http://www.irs.gov. There is a good "Frequently Asked Questions" page that attempts to "decode" various tricky scenarios for taxpayers.

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