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

[real estate rebates]

thanks for the tip

[TTSBisBS]

Tami--why would you say that? Are you one or the other?

[Phil]

OK Third Time is a Charm. AGAIN 1)click on my name. 2)click on the direct deposit line of the IRS FAQ's 3)Then scroll down to #10
FAQ I reference to my original comment. This is what happens when your writing while being ticked off.

[Phil]

SORRY CLICK ON MY NAME and scroll down to FAQ #10 on the IRS web page for information on my comment.

[Phil]

If you paid a tax bill through direct debt click on this link to find out why you didnt get your stimulus payment through direct deposit. Turbo Tax should have added extra lines to enter the account information. This was updated by IRS as of 3-20-08. Plenty of to catch the potential issue and fix it. Now I have to wait two months because I was to effcient and didnt send by payment by snail mail. SHAME ON YOU TURBO TAX

[Jim]

i owed the government and paid them on feb 18 - yes - i paid before it was due in order to just get it over with - I thought i was getting the direct deposit on 05/09/09 - since i paid thru direct withdrawal - Im confused! will i get a paper check or what?

[Tami]

i know what you mean. i can't believe they lied to us even afte they changed the law about the way we receive our payment. my mom and i both e-filed with TT and had our fee's deducted from our return. How ever she received her rebate on time by DD. mine how ever was supposed to be here on may 16 it's now the 21st and i'm told it will be mailed in july. that's not fair. i want to know why mom's was DD and mine won't be.

[Ben Bingham]

blah, blah, blah, i think the hookers and coke dealers can wait a few more weeks, or ask if they'll take a post dated check...

[Robert]

F you turbotax thx alot

[Bill Alexander]

well looks like tt just lost another customer here also after finding out we have to go through india , whats happening to america lately, no control on prices any more , hell letem get high as they can we'll go back to horses and wagons cheaper on fuel , and nuthin but horse gas .

[terri]

I thought I was alone in getting screwed by Turbo Tax because of something I did wrong, but I guess i am not. I wonder if Turbo Tax owns Santa Barabara Bank, it must because why else would it have charged a ridiculous fee to "transfer" money from the IRS to "thier" account and then to mine. Why need the middle man? And now to find out Turbo tax is screwing me out of a direct deposit for the tax rebate. WAY TO GO Turbo Tax. This is the last year you will get a penny of my money and I hope to see a mass lawsuit filed against you

[Mary]

OK. it does suck, but you are all missing the point. ANY program that you will use to file and get Direct Deposit other than putting your account number right on the 1040 (or other form) and letting the goverment touch your account directly will force you into a paper check. So if you get a Refund Anticipation Loan from H&R Block, etc you would still have lost out - or another program online - same thing. Unless you paid some joe schmoe accountant to help you fill out your forms and then mailed them in with your acct info on the form for the govt to see and waited the month or so (much longer than TT or any company's RAL wait times) for the govt to process and deposit into your account - you we/are going to be screwed. And since the govenment didnt decide to do DD people first until March, they also didn't come up with the criteria of what they considered "DD" versus third party direct deposits until that time too, so how could TT be any worse. If you look at some of the other online sites, etc (my friend uses HR&B online) those people are whining the same way too about how they'll never use their company again, etc. etc.
The point is, it is another way for the gov't to wimp out of getting us the money back as soon as they promised. By saying DD and then putting all these limits on it, they look like they are ahead of the game, but then they can still delay getting most of the money out until the date they really wanted.
And yes, logically, they DO have our info since it is on the tax forms we completed, even if the money is actually going through SBB&T first - but the govt is the ones being too lazy to read that info and send you your check anyway.

Just an FYI. And no, I am not going to say any kind of poo-pooing "dont count your chickens" stuff. I too have a vaca planned and now my money will not be here until three days before I leave, since my SSN is in the dead last category... just trying to make sure you all understand what is really going on.

[Mandy]

I don't know what is happening to people anymore. Why is everybody complaining about this rebate? We should all be glad that we are getting something instead of complaining that it is not here on time or blaming Turbo Tax. I think Turbo Tax is great. I have used TT for two years now. My check is super late and I live paycheck to paycheck and I am grateful that I am getting something if I get it. Start appreciating what we already have instead of complaining about what we do not have. That is the problem. People are just greedy anymore.

[beth]

I dont know why anyone would want to use h&r block, they charge you an arm and a leg to do taxes that for most are extremly simple. Unless your in the position that you need the money that day or the next day your paying way too much money and I know I cant afford to throw money away like you people are talking about. All of you people who are whining about this sound like you have more then enough money to throw around so stop bitching

[debbie]

well well glad to see that i am not the only who did nt get there checks on time i was suppose to be one of the first ones to get my check should have been here on 2nd of may but no!!!! now everybody says we will get a paper check instead of dd but then some people said they did get there stumlis dd so what 2 do and how do you find out you cant call the irs they wont answer the phone so what do we do?????? i will never file with tt agian i had no idea until after i filed my taxes that irs.gov you can file for free so everybody file for free next year at www. irs.gov dont ever pay tt agian they suck. we should have been warned about the stimulus payments its the poor who need there money living paycheck to paycheck each week so dont hand me the bull about you shouldnt have spent what you dont have. never agian will i file with tt

[STG]

A bunch of whiners here. Some of you may get your rebate delayed? End of the world. It is all a conspiracy against you, personally, President Bush hates you and Turbo Tax cheated you knowing last year about the rebates. Give me a break.

[Jeremy (Honest Abe)]

HI there- for whats its worth...
We used Turbo tax for the first time this year. We decided to do so instead of using H&R Block which We normally do. We did not have any fees (0) taken out of the Regular IRS Tax Refund We chose to have Direct Deposited into Our Bank Acct. It was DD very quickly and, We have also had Our Stimulus Rebate Direct Deposited into Our Bank Acct. already! It went in by the Date shown on the IRS site which is listed on the "Shedule" section!

So all in all it was all Direct Deposited into Our Bank as scheduled and, on time!

We had heard that even though We had Our Regular Refund DD and, even though We had $0.00 in fees..that We would have to wait on a Paper check for the Stimulus Rebate...maybe this will help dismiss any "rumors" You may have heard. Thanks for reading!

Go Dodgers-Its Our year for the Pennant!! :)

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 telephone 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

[Raymond Lippitt]

Free Money?
This person hasn't purchased much gas lately. I am paying about $300 every two weeks to get to work. I don’t think the government is doing enough. They are giving the money that they are ripping me off for to people that haven't paid.

[Raymond Lippitt]

Turbo Tax Screw Up
I paid for Turbo Tax to give me the correct advise. When I get cut from a direct deposit because of Turbo Tax's screw up (Santa Barbra) I would expect them to make good on it instead of crying that it isn't their fault.

[Erik]

This isnt Turbo Taxes fault. How is this a scam????? Nobody is getting your money but you. So where is the scam? The scam is simply to make you "wait longer" to get your rebate? ooh,...good one. This wouldnt be an issue AT ALL if we WEREN'T getting a stimulus rebate this year. TurboTax is already working on putting together the software for TURBOTAX 2009, meaning the version we all used to do this years taxes was made LOOOONG before President Bush decided to give us rebates and third party methods like SBBT are how TurboTax has ALWAYS done tax refunds. You do your taxes on your PC, elect e-file, elect direct deposit, send,...and a week later,...boom....you get your refund deposited right into your account. You elected to have fees taken out of your refund because it was the easiest way to do it. All these years that we HAVENT been receiving stimulus checks, turbotaxes method has never been a problem,...in fact, most of us probably never even knew or cared about Santa Barbara Bank and Trust. All we cared about is the fact that we got our refunds,....period. Now,...since we have a stimulus rebate coming this year....now, we all care about it all of the sudden. Every shred of the procedure used to electronically transfer funds from IRS-to-SBBT-to-YOUR BANK ACCOUNT, is outlined in detail on the form you signed acknowledging that you agree with it. YOU HAVE TO READ IT BEFORE YOU SIGN IT. Just like anything else. And if you answer,..."I didnt read it, because I didnt care",...well, yeah, I agree,...if we werent getting a stimulus rebate,..then,..yeah,....who cares? When we were kids, we didnt care what knife Mom used to spread the peanut butter and jelly,...just as long as we got the sandwich. Now, all of the sudden, that knife matters, only because its holding up something that we normally do not get anyway,...otherwise,...we would just be sitting there with PB&J smeared all over our smiling faces.

[Michael]

TT needs to disassociate themselves from SBBT. I have emailed and called SBBT to find out why there was no mention that they would not be DD the Stimulus Pmt.
I got the corporate address:

Santa Barbara Bank and Trust
PO Box 1030 Solana Beach, CA 92075 Attn: Loan Underwriter.

I doubt it will do any good but I'm starting a letter writing campaign asking why no one was told about this fiasco they created.
Regardless I am going to write to my representatives, the banking industry, FDIC.gov and others to try and get answers and bug them 'til I get satisfaction.
Turbo Tax should have told it's customers (and former customers) about this impending disaster - it was their duty.
To the person who wrote the blog comment about people spending their money before they had it - SHAME ON YOU!
Paying customers deserve to have information as important as that at the very least !!
SBBT has chosen to ignore the problem and do nothing. Allowing people find out after the date they believed they would receive the Direct Deposit is UNACCEPTABLE!

INTUIT: Drop SBBT as an option to pay for fees - this will show good faith to your customers. If you choose to continue to affiliate with SBB&T. I will no longer require your services (and it sounds like I am not alone)!

[Disgruntled Filer]

MPORTANT -- Using "Refund Transfer" with Santa Barbara Bank & Trust could affect when you get your rebate

Even if you have received or will receive your tax refund by direct deposit to your bank account using Santa Barbara Bank & Trust, the IRS will not do the same for your tax rebate. It will mail your rebate instead.

This applies only if you used the "refund transfer" service when filing. The service lets you pay for your tax preparation and/or e-filing from your refund proceeds, for an additional fee, rather than use a credit card.
Why does a refund transfer affect the date I receive my rebate?

When TurboTax customers chose this payment method, they authorized the bank to set up temporary accounts to be used only to receive their 2007 refunds from the IRS. The IRS sends the refunds to the temporary accounts and the bank transmits them directly to customers.

Because the IRS does not, in fact, receive taxpayers bank-account numbers under this method, it has stated that it cannot match taxpayers with their current bank accounts.

That's why the IRS decided that taxpayers who entered into financial transactions with third parties, such as SBB&T, would get rebates by mail. This also applies to taxpayers who use "refund anticipation loans" or RALs (loans made to tax filers against their expected refunds). TurboTax does not offer RALs.
Why did it take awhile for TurboTax to tell customers about the impact of refund transfers on the rebate payment schedule?

The law creating the tax rebates, the Economic Stimulus Act of 2008, was signed by President Bush on Feb. 13. As soon as details of the act emerged and could be verified, TurboTax updated customer articles about the rebates, including information on refund transfers.

It was not unti mid-March that the IRS announced the rebate payment schedule. The schedule revealed that rebates would be mailed in order of the last two digits of taxpayers' Social Security numbers AND that direct deposit recipients would get theirs first.
When and how you'll get your rebate

Check this IRS Web site: Stimulus Payment Schedule

To learn the status of your rebate, visit this IRS site: Where's My Stimulus Payment?

Use this online tool to learn when you will receive your rebate and how much it will be. However, the IRS says that information about your payment won't be available until about a week before your rebate is scheduled to be issued. Refer to the schedule above.

[Disgruntled Filer]

I am not using Turbo Tax, ever again. Have to wait a month for my Tax Incentive Check...

[Kurt Meister]

Congratulatiions TT and SBBT, you just killed the goose. You have lost my business...forever. The one, small, petty conciliation, is that what goes around comes around. Intuit/TurboTax -and- Santa Barbara Bank & Trust are certain to feel the crunch next season. All of us once burned not only won't be back but will be sure to remind others of our mistake.