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A look at the tax rebate checks

April 15, 2008 11:43:01 AM PDT
With all the economic ups and downs lately, the federal government is getting ready to hand out special tax rebates hoping to jump start the economy.

In the Bay Area, salaries are higher than most of the country and these rebates are tied to your income. So can you expect a check from the IRS this spring?

In the San Francisco Financial District, six-figure salaries are not uncommon.

"It's cost of living especially living here in San Francisco. Salaries are higher and all of our costs are higher," said Bonnie McFarland from San Francisco.

So when the government mailed out notices announcing the rebate, lots of folks here figured they'd get "none of it."

"I got it in the mail my neighbor came over and said you might as well throw that away," said McFarland.

"I think my income level is a little above the threshold for that," said Bruce Rosen from San Francisco.

So what is the threshold? We talked to certified public accountant Sandy Collins.

"It depends on if you're married, single, how many dependents you have," said Certified Public Accountant Sandy Collins.

Here's the basic formula:

Single taxpayers with up to $75,000 in adjusted gross income will get a $600 rebate.

Couples earning up to $150,000 will get $1,200 back, and if you have kids? You'll get $300 for each dependent child under 17.

"A lot people in the Bay Area are not going to get a rebate because their income is going to be too high," said Sandy Collins.

So, what if your income is above the limit? In that case the rebate starts to go down. The more you earn, the less you get and if you make too much, you get zero.

"I got the notice in the mail and I read it already and I'm not eligible," said Carrie Schiliemann of San Francisco.

Here's examples of people who won't get any rebate:

  • Single taxpayers with no children earning $87,000 or more.
  • Couples with no children earning $174,000 dollars or more.
  • Couples with two children earning $186,000 dollars or more.
  • Couples with three children earning $192,000 dollars or more.

    Sandy says the higher incomes are fairly common in the Bay Area.

    "Overall probably not benefit as much from the economic stimulus package because I don't think as many people will qualify," said Collins.

    U.S. Census data backs that up. For example, it says more than one-fourth of married couples in the Bay Area earn more than that $150,000 limit. Compare that with Cleveland where just two percent of couples earn that much.

    But averages aside, there are plenty of people here who will get a rebate.

    "There are a lot of us recent grads who are still struggling. For some of us it will make a difference," said Brittani Parks from San Francisco.

    "A lot of people who are in lower income areas of the Bay Area will probably qualify," said Collins.

    "It would be nice, go do some traveling, or buy some more clothes," said Parks.

    It's important to note the formula is based on earned income, not tax-free income. You don't have to apply for the rebate, but you "must" file a 2007 tax return to get it.

    Related links:

  • Economic stimulus rebate information center
  • Economic stimulus payment calculator


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