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Four Tips Recovery Rebate Credit
Figuring the Recovery Rebate Credit incorrectly or entering inaccurate information will delay the processing of your tax return and any refund due.Below are the four things every taxpayer should know about this one-time credit, which is related to last year’s Economic Stimulus Payment:
1. You do not have to pay back your Stimulus Payment and the payment is not taxable.
2. Less than an estimated 3 percent of taxpayers are eligible. The vast majority of taxpayers are not eligible to receive the Recovery Rebate Credit.
3. Did you have a major life change? If so, you may be eligible to claim the Recovery Rebate Credit. Some of the major factors that could qualify you for the Recovery Rebate Credit include:Your financial situation changed dramatically from 2007 to 2008.You did not file a 2007 tax return.Your family gained an additional qualifying child in 2008.You were claimed as a dependent on someone else’s return in 2007, but cannot be claimed as dependent by someone else in 2008.
4. Any Recovery Rebate Credit amount will be included in your refund. The IRS will figure the credit for you and include it in your refund or put it toward any taxes owed.
Highlights of the American Recovery and Reinvestment Act of 2009
Here are some key highlights:
Increased Transportation Subsidy. Employer-provided benefits for transit and parking are up in 2009
Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.
Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carryback, an expanded section 179 deduction and other business-related provisions is now available.
COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.
First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement.
Enchanced Credits for Tax Years 2009, 2010. Details available on the earned income tax credit, additional child tax credit and American Opportunity Credit, a new higher education benefit.
Payroll Checks Increase This Spring. The Making Work Pay Tax Credit will mean $400 to $800 for many Americans. The IRS has issued new withholding tables for employers.
$250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board.
Stacie's Tax Stuff 
