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Some guidance on the tax rebate check

Here is a primer on the federal tax rebate that will result from the tax cut signed into law Thursday by President Bush. Information comes from congressional offices and the U.S. Department of the Treasury.

Who will get the rebate?

Every American who filed a 2000 tax return is eligible. Those who had absolutely no tax liability (their tax bill was 0, or they got a rebate from the government) will not get a rebate check. In order to get the full amount of the rebate, a single taxpayer must have had at least $6,000 in taxable income for 2000. A married couple filing jointly must have had at least $12,000 in taxable income for 2000 in order to get the full amount. (see below)

 Tax rebate schedule
Date mailed Last 2 digits of Social Security #
July 20 00-09
July 27 10-19
August 3 20-29
August 10 30-39
August 17 40-49
August 24 50-59
August 31 60-69
September 7 70-79
September 14 80-89
September 21 90-99
 Source: Internal Revenue Service

Watch the White House ceremony where Bush talks about the cut and signs the bill (June 7)

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President Bush speaks on tax cut bill passage
Highlights of Bush's 2002 proposed budget
Taxing and spending: Bush budget

When will people get the check?

The government will start sending out checks in late July. They will send out nearly 100 million (98 million) checks. The checks will go out over a 10-week period. The Treasury Department will use the last two digits of people's Social Security numbers to determine the order of mailing. Those with 00 at the end of their SS number will be first in line. Those with 99 will be last to get their checks. All of the checks to regular filers will go out before the end of this fiscal year, September 30. For late 2000 filers, there will be some checks that go out after September until December.

How much will the rebate check be?

Most singles will receive about $300. Single parents will receive about $500. Couples will receive about $600. But some taxpayers will receive less. These figures are MAXIMUM amounts. No one will get more than these amounts.

How is it calculated?

The rebate is equal to 5 percent of a person's taxable income for the year 2000 ... with ceilings set at the figures above ($300 for singles, $500 for single parents, $600 for couples). That's why some people will get a little less. For example, someone whose taxable income (after deductions, etc.) gets down to $5,000 will only get a $250 check. And again, anyone with ZERO tax liability will get no check.

Why is this check coming?

The tax bill the president is signing immediately creates a bottom income tax bracket of 10 percent, effective retroactively to the beginning of this year. That means the first $6,000 of a single's income or the first $12,000 of a couple's income is suddenly going to be taxed at 10 percent (instead of the old 15 percent rate). Because this change is retroactive, the government will owe everybody who already paid some of those taxes (through withholdings from their paychecks from January until now) some money back. The Treasury Department points out that this is not officially a "rebate" ... it's an "advance payment" to taxpayers of money they would have gotten back from the government as a rebate when they filed their tax returns next April (for 2001).

When will people hear from the IRS?

In mid-July, the Treasury Department says every taxpayer will get a letter informing them of the check that's coming.

What do people have to do to get their check?

Nothing. As long as a taxpayer filed a 2000 return, he is eligible. The Treasury Department says no one should call the IRS or the Treasury Department. They say the government knows where to find you.

What about late filers?

Those who filed for an extension and haven't filed a return for 2000 yet better hurry, according to a Treasury spokesperson. The sooner they file, the sooner they'll get the tax credit and therefore a rebate check. If they don't receive a check before December 2001, they would be able to apply the credit to next year's tax return, when they file next April.

What if you've moved since filing your 2000 return?

Taxpayers who've moved should file an official change of address form with their local U.S. Post Office.

Is there a website where taxpayers can find out more about their checks?

There is a website with lots of information -- It won't tell taxpayers exactly how much their check will be for, but it will tell people when the checks are going out. (The exact amount will come in that letter from the IRS in mid-July). On the IRS website there are fact sheets about general questions.

• Internal Revenue Service
   • 2001 Advance Payments Information
• The White House
• Congressional Budget Office

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