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he is getting 100% of it back due to deductions, credits, and a business loss. So unless I totally misunderstand what you are trying to say, in his case it is accurate to say I DIDN'T HAVE TO PAY TAXES LAST YEAR. Not a dime.

You are correct. He didn't have to pay any income taxes last year. I don't know if it applies to your friend or not, but there are people who don't even have to pay FICA/Medicare because of the EITC and Additional Child Tax Credit. Sorry I didn't make it clearer that I was talking about the millions of people who make the "I didn't pay" statement while actually paying.

So in his case, my understanding is he'll be getting a$300 rebate instead of the $600.

Maybe, maybe not. In determining his tax liability for purposes of the 2008 "stimulus" credit and the advance payment checks, it's income tax net of credits except for the Child Tax Credit. So, his could be more, depending on that adjustment.

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