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Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121181  
Subject: Re: $600 argument Date: 1/30/2002 5:54 PM
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Tuni writes (in part):

1.Seems to me I read that the $600 rebate was to be shown on this year's 2001 IRS form. My spouse says it was a rebate of last year's taxes???
Who is correct?

2.Also, I thought from my reading of various posts here that if we received the $600 and had to pay the IRS (we always have to pay), we have to count the $600 in our payment to the IRS?
Is this correct?


I reply:

Here's how it works. The decision to send you a check, or not, was based on your 2000 income. However, the check was actually designed as an early refund of part of the taxes due on your 2001 income. Thus, some people who would not have been entitled to a check based on their 2001 income actually got one because their 2000 income justified it. Those people got lucky; they will not have to repay the excess.

In contrast, some people whose 2001 income justifies a rebate didn't get one because their 2000 income was too low, or because they didn't timely file their 2000 taxes. Those people will get credit for the "missing" check on the taxes they will pay by April 15, 2002, by receiving a tax credit in the amount of the check that they should have received.

Finally, if you got what you were entitled to, your tax liability will be unaffected. --Bob
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