Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.