Tax Rebates –What’s the Catch?

That’s been a common question from our customers at TurboTax ever since the Economic Stimulus Act became law Feb. 13. It’s not surprising. We’ve all doubtless been warned: “If it’s too good to be true, then it probably is.”  In fact, Google lists 50 million variations of this adage.

Then how could it be true that the government wants to give most of us what is essentially free money? The simple answer is, because the federal government wants to put money in our pockets so we’ll spend it and help stimulate our slowing economy.

Under the act, starting in May some 130 million Americans will receive what’s known to most as a tax rebate. You might hear the IRS call it a stimulus payment. It will be worth at least $300 and as much as $1,200 or more per household this year. Furthermore, it won’t reduce your 2007 tax refund, need to be repaid later, or be taxed in another year. It won’t lower any government benefits you normally get. And if you’re likely to get a stimulus payment, the IRS will send you a letter telling you how you can (you may have already received this). Hint: You have to file a 2007 tax return, even if you don’t normally need to.

So go ahead and get your share. Learn here if you qualify.

Unfortunately, you might not get a rebate if your 2007 income is too high or too low. But, wait, you won’t necessarily miss out. If you didn’t get a payment or got a partial payment because your income was too high or too low, you’ll get a do-over next year. You can use your 2008 income to qualify, when you file a 2008 return in 2009.

Conversely, what if your 2008 return shows you would get you a lower payment than you did with your 2007 return? No worries. Just keep the difference -- really. Also, if you have a baby or adopt a child in 2008, more good news. You could still get a stimulus payment for that child on your 2008 return.

What if you owe federal income tax from a previous year, student-loan debt or back child support? This is where your “luck runs out” (only 372,000 Google listings) because as it does with regular tax refunds, the IRS will turn your free money into a payment of those debts. 

Comments

[Ryan]

This is not free money, for whoever said that earilier in the post. The rich get richer and the poor get poorer. Middle class gets screwed. Why cant political candidates look at these situations and comment on them.

[Todd]

Well, I am also frustrated with TT. Only because I filed after the new law was signed and TT provided me with wrong information. I called to question this and was assured that if I used the refund to pay the fee it would not affect my return or rebate. So yes, I shorted myself this week because of the assurances I received... And I made a bad choice to beleive them, and yes this will cost them som $$$ next year. So if you're one who is tired of reading the bitchin, then you must work for TT. But what takes the cake is they made no attempt to tell me anything else once they realized their bs mistake.

[average joe]

I will not be using tt again. They gave my money to Santa Barbara bank so that they could use the money to make a small amount of interest off of my money. Now I am screwed. I am not rich I planned on that money to get ahead on bills now instead I will be playing catch up once again. thanks TT for helping keep me a slave to my D to I ratio. A$$hole$! Its not bad enough that Uncle Sam TAKES our money from us every pay period. then gives us what they over took back with no interest!

[Josh]

It sounds to me like most of the people who are upset made a bad choice by spending money that they didn't have yet. I was looking for a Direct Deposit today, too, but I didn't think I was being a genius when I decided not to spend money I didn't have yet.
Also, if you refer to the website that the IRS set up for the stimulus payments, it says BOTH "transmitted no later than" and "allow two weeks from date on schedule". I'd suggest you write the IRS some hatemail instead of bashing Turbotax for something that's not even their fault. I've used Turbotax for years, and it beats the heck out of paying some guy $100-150 to break out his $5 solar powered calculator for you.

[T]

I used a credit card for my payment to TT this tax season and I haven't received my rebate yet. I even called the IRS earlier this week to ask because I had to file an amended return, and the guy said I should see my rebate direct deposited on the 9th. There's only an hour and a half left before it's the 10th, and I haven't seen a penny. WTHeck is going on?

I don't blame Turbo Tax almost all the filing services are having the same problem. Unfortunately this governments administration is incapable of keeping it's promises or telling the truth about anything. I have used turbo tax for years now and have never had a problem but as soon as the government stated that we would be getting rebates I should have known better than to believe another one of thier stories. I'm not blaming Turbo tax i'm blaming myself believing more of the governments crap.

[adam]

I too used tt to do my taxes, and was expected to get my rebate check dd today. This was a bit upsetting however if the government would have let us all know that we would be getting our checks mailed out in the first place. I think people wouldn't be upset at all.

[B]

For anyone checking these, I suggest you take it directly to TT themselves. I called their (India) call center, demanded a supervisor and they are sending me a $29.95 refund for the SBBT charge in the form of a check. You have to go throught he "contact us" link process, select "Billing", then select call us in order to get a number and a special code to call in. Or, if you want to talk to someone here in the United States:

Intuit Inc.‎
7535 Torrey Santa Fe Rd, San Diego, CA
(858) 215-8000

[B]

Don't bother trying to contact TT about this. They have outsourced all of their call center operations to India. Yup, that's the American company we all love. The rep I called told me straight-up that we aren't allowed to talk to anyone in the United States.

[Jocelyn]

For all of you who have heard that you will receive your payment by paper if you used Turbo Tax and received DD thru SBBT. ITS NOT TRUE. I received my payment this morning ON TIME and I received my refund via SBBT. Since I was freaked out by when I read all those postings, I just thought I would let people know.

[BAMonroe]

Ya we were never to know that this is what would happen. Why cant ANYTHING be simple anymore!!! You direct deposit you get your check DD....but NOOOOO ...if you used a 3rd party to do this and that and this and that then your f'ed...well this was the first time I used Turbo Tax and its the last time.

[Braceman]

I used TT to do my taxes, but didn't pay the fee to file electronically. I printed them out and mailed them. I remember a TT question asking me if I wanted my stim check direct deposited. I chose yes (duh). But I'm wondering. Since I mailed my return in does that mean I'm getting my stim in the mail? Anyone else do this?

[A]

I will NOT pay money to turbo tax again. I am upset just as theese others are with not getting our rebate after choosing direct deposite for our income tax refund. Those of us that choose to deduct our fee through our refund are the same people who need the money the most. (most likely to pay for the cost of food or gasoline!)

[heather]

So if i am reading this all correctly we are all getting screwed by TT because we paid them to do our taxes and direct deposit and now money that was needed this week we dont get until June. Sounds like a scam some how to me. I think next year i will go the irs site and file for FREE. Sad because I have used TT for years and really like the convenience. Well not any more. Thanks TT, for helping ruin plans we all had.

[aaron]

Aaarrg! - weeks ago I heard a coworker say something about not having his fees deducted from his refund (I think mine totaled $68), and now I find out I'm getting hit 2 times!!! Just like the Bush-ites & Big Oil - naughty kids in a candy store - grab all you can while no one is looking (a.k.a. de-regulated free market economy a.k.a. predatory capitalism). Still, shame on me for not paying more attention, and for counting my eggs before they're hatched. Bottom line: TT & SBBT should offer all of their customers free software AND free filing AND free direct deposit for 2008.

[Linda]

I too am upset, I thought I would have gotten my stimulus refund in my checking account via direct deposit today. I called the 1-800 number only to find out it would be mailed out and I should receive it on June 9th. I have used TT for years. I will not be using TT anymore after this. They make sure they get their money, so does the bank and then you get the rest of it. TT should have told everyone about this. They notify you in December each year as a reminder to file taxes with them.

[Danni'l]

This really makes me angry, I know that it isn't TT's fault.. But the fact that I DD and payed the fee's with my refund... for convienence... its now biting me in the ass. I am a single mother.. who's kids are in desperate need of dipers and various other things. I was depending on this.... I am def. UPSET... Now what will I do?

[Paula Beard]

Just to let you know, I feel the same as the others, now I will not get my or my son's rebate until the end of June or July. SBBT and TT made a fortune with the filing fees and service fees. In our case SBBT tool $131.70 out of our returns plus what $45+ I paid TT for the program and what they received from SBBT. I agree the IRS or the federal government should shut both of you down for poor business practices. Having used TT for several years and gone along with the payments to SBBT you can count on this when renewal comes next year I will not be renewing. Evidently, I didn't need to go through SBBT to start with and this is nothing but a scam by SBBT. I plan to be sure my Senators and Congressmen know about this systemn. Maybe if we get a Democrat gets in this type of crap will no longer be allowed.

Thanks for nothing. You should have seen this coming and fixed the problem before it got this far along. I filed in February and now have to wait because of your lack of care and concern for your own customers. Thanks!

[Matt]

Wah wah. What a bunch of whiners bitching about free money being delayed a couple weeks. It makes perfect sense why it happened this way. Get a grip folks.

[Debby]

Free money - IRS = be very wary
In my case, I was and decided not to depend on the government for "free money" because it seemed to good to be true. It was a good thing that I decided to go that route. Like everyone else I was expecting to get my stimulus payment by DD on May 2nd and, of course, it never came. It is not TurboTax fault or anyone but our own because of the way we chose to pay for our tax return. Depending on something that seems too good to be true and then blaming someone else for your decision is just plain childish.

[Amy]

Your DD plan for "conveniently" paying for tax prep. out of my rebate is just fanfreakintastic. Smell the sarcasm? You could have warned us. I have been looking for my rebate all week, and just found this crap out today. I had my daughter's birthday party riding on this, because all we knew was that if you DD'd your rebate, you'd get the stimulus DD'd too. And NOW you tell us. This is careless business practice, and I doubt you will see the same numbers of customers coming back to you in 09

[Lisa]

What if I owed this year so I had to provide CC number to pay the fee? Will I get my check today or not because I used 3rd party software?

[DM]

I have used Turbo Tax the past 4 years and today my rebate was direct deposited into my account!

[lahlah]

TT is a crock - I have used their tax services for years, but am here to tell you it will be the last time I do. Not only was their information useless, you could not get direct answers, the tax information that was available to you was useless, and now this - try taxbrain - I did my sons taxes on there this year and their site is much more user friendly, plus they have live chat for no additional cost to you -

[screwturbotax]

Yep TT completely screwed all of it's users, there is no valid reason they can't pass on the info to the IRS the same way they did with the original direct deposit. I for one will never use their software again.