One week after President Bush signed a $152 billion economic stimulus package, millions of Americans have one question in mind: When do I get my money?
The short answer: Sometime after early May.
You can expect more details soon from the Internal Revenue Service on the distribution of tax rebates to some 130 million taxpayers. In the meantime, there are two steps you can take to ensure you receive your payment as early as possible.
First, file your 2007 federal income tax return on time. Second, on that return, arrange for direct deposit on any refund you're due to receive.
"This year, perhaps more than ever, it's important for taxpayers to elect a direct-deposit option," acting IRS Commissioner Linda Stiff said last week. "This will speed up not only getting their refunds but also speed the receiving of their stimulus payments."
Stiff and the IRS provided early information on the delivery of the payments after Bush signed the bill last Wednesday that was meant to give the U.S. economy a boost by putting cash in the hands of low- and middle-income Americans.
The one step that must be taken by every eligible recipient is to file a 2007 tax return. That includes those who did not earn enough income to owe any tax. Without a tax return -- and without a valid Social Security number -- there will be no payment.
For most taxpayers, filing a return will be enough. Some, however, will need to take additional steps.
Stiff said the distribution will start in early May, with most recipients receiving their payments by summer. Beware, however, those who request an extension and file returns after April 15 may not receive their tax rebates until late in the year.
For those who somehow missed the news, let me step back and explain the details of the tax rebates program.
The bill passed by Congress and signed by the president calls for payments of up to $600 for single individuals and up to $1,200 for married couples.
Taxpayers who owe less than that on their 2007 income would receive smaller amounts equal to their tax liabilities. At the lowest income levels, taxpayers will receive minimum payments of $300 for singles and $600 for married couples for those who received at least $3,000 in earned income, Social Security benefits or veterans' benefits last year.
Supplemental Security Income will not count toward the tax rebates.
Parents eligible for their own payments will receive an additional $300 for each child under 17.
Taxpayers at higher income levels would see their rebate payments, including those for children, begin to phase out at adjusted gross income of $75,000 for single individuals and $150,000 for married couples filing jointly. Their payments would be reduced by 5 percent of the amount over these levels.
That equates to $50 for every $1,000 in additional income, meaning a married couple with adjusted gross income of $174,000 or greater would receive no payment.
The IRS provides more than two dozen examples on payments for various income levels and family size.
One example: a married couple with two children, adjusted gross income of $35,000 and a 2007 federal income tax liability of $1,070. In this case, the couple would receive a total of $1,670 -- $1,070 for the parents plus $300 for each child.
Another example: A single parent with two children, adjusted gross income of $60,000 and a 2007 federal income tax liability of $600. This individual would receive a payment of $1,200: $600 for the parent plus $300 for each child.
Individuals at lower income levels who ordinarily would not need to file a tax return because their incomes fall below required filing levels will need to file a return this year to receive their payments.
In addition, Stiff said last week, there are a few categories of individuals who must take some extra steps to ensure they receive their payments. They include individuals who already filed a 2007 return that showed less than $3,000 in qualifying income but did not list income from Social Security, railroad retirement or certain veterans' benefits that will qualify them for the tax rebates. Those individuals will need to file an amended tax return using Form 1040X.
Also, anyone who moves after filing their 2007 tax return should notify the IRS by filing Form 8822 and notify the U.S. Postal Service.
The IRS said most taxpayers can expect to receive at least two notices about the economic stimulus program in the coming months. The first will explain the program; the second notice will confirm eligibility, the amount of expected payment and when it will be paid.
Direct deposit could cut the time it takes to receive a tax rebate by at least 10 days. That is the difference in delivery time between direct deposit and a check sent via mail for a normal tax refund, according to the Congressional Joint Committee on Taxation.
For more information on details on the tax rebates program, visit the IRS Web site: www.irs.gov.
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
David McPherson is founder and principal of Four Ponds Financial Planning (www.fourpondsfinancial.com) in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at firstname.lastname@example.org