Recovery Rebate Credit
Summary of how Recovery Rebate Credit works on a 2008 Tax Return:
1. The Recovery Rebate Credit is computed based on the 2008 income, tax,
exemptions, and filing status.
2. The Economic Stimulus Payment received in 2008 is subtracted form the
Recovery Rebate Credit.
3. If the Recovery Rebate Credit is more than the Economic Stimulus Payment,
that amount is refundable credit on the 2008 tax return.
4. If the Recovery Rebate Credit is less than the Economic Stimulus Payment,
the Recovery Rebate Credit is zero.
Use 1040 worksheet 5, line 28 to calculate and visit the IRS website to lookup your stimulus payment received from 2008 if you forget.
Returns with income tax liability: The Recovery Rebate Credit is the
generally the amount of net income tax paid (before application of any child
tax credit. There is a minimum and a maximum:
Minimum : $300 ($600 on a joint return)
Maximum: $600 ($1,200 on a joint return)
Returns without income tax liability: The Recovery Rebate Credit is also available to filers who have no tax liability, if the taxpayer has at least $3,000 in qualifying income. These taxpayers get the minimum Recovery Rebate Credit.
$300 ($600 on a joint return)
Returns with dependent children: The Recovery Rebate Credit is increased for someone who is qualifying child for the child tax credit. The child must have a valid social security number:
$300 per qualifying child
The bottom line is that the taxpayer must be paying income tax or have at least $3,000 qualifying income to qualify for the Recovery Rebate Credit.