Stimulus yes, rebate check no

February 13, 2009

Capitol-Winter cropped
The latest economic stimulus package,
officially known as H.R. 1, the American Recovery and Reinvestment Act of 2009, is halfway home.

The House signed off on the compromise measure this afternoon. The Senate could possibly vote on the bill tonight.

As soon as details about what was in the bill, and especially the Making Work Pay credit, started coming out, people started asking questions. Now that the new tax break is imminent, the queries are coming fast and furious.

"I already filed my taxes for this year. Do I need to refile now to get this money?" asks Jessica.

"Will this 'working' money be sent out to us like last year's stimulus rebate?" writes Joe.

Jessica and Joe, the answer in both cases is "no."

New credit, old payout method: In its final form, the new tax break will entitle workers making $75,000 individually or $150,000 as a family to $400 per person or $800 per family.

If you make more than those earning limits, the credit amount starts phasing out. It disappears completely if your income is more than $95,000 as a single taxpayer and $190,000 if you are married and file jointly.

This time, though, whatever amount you get will not be sent out as a separate check, as was done with last year's stimulus rebates. Rather, the distribution plan for the Making Work Pay credit has always been that it be parceled out in your paychecks; hence the name.

What happens next is as soon as H.R. 1 is law, the IRS will issue new withholding tables for use by employers and/or the payroll companies to which they outsource. The IRS has known this was coming, so they've had a head start.

Those new amounts then will be plugged into the payroll systems and you'll have a smaller amount of taxes taken out of your pay via withholding to reflect the $400 per person credit.

If all goes according to plan, the ultimate amount that you'll get back this year, a few dollars a time each payday, will add up to the $400 per person credit amount, as long as you are under the income threshold.

So all workers have to do is wait for Congress and then the IRS and payroll administrators to do their jobs.

More info on its way: I'm working right now (well, right now I'm typing this, but you know what I mean) on a stimulus story for Bankrate.

As I examine the measure and have time between my Bankrate job and sleep, I'll share how the tax provisions of H.R. 1 might affect you, your bank account and your future tax filing and planning. So please stay tuned!

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
Added summer income means more tax considerations

June 16, 2026

Many young people take food service jobs during the summer. It’s a good way to…

Read More
Tax Season 2026 Continues!

We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • Stimulus tax breaks: what’s in it for your business

    The “stimulus” bill passed by Congress last Friday has some tax breaks that will generate cash for those businesses fortunate (or unfortunate) enough to qualify. Estimated tax breaks. If more than half of your income comes from a small business,…

  • Stimulus tax breaks: what’s in it for your business

    The “stimulus” bill passed by Congress last Friday has some tax breaks that will generate cash for those businesses fortunate (or unfortunate) enough to qualify. Estimated tax breaks. If more than half of your income comes from a small business,…

  • Great information here and thanks for paid out how it will be paid. This is one of my open questions. Still I wonder is the $10 or so will make much of a difference to most people.

  • You caught me! Since I got another year older!

  • Since when did you start sleeping during tax season? This isn’t the Kay Bell I know. 😉

Comments are closed.