AMES, Iowa -- Americans, more than 130 million of them, are considering how to use their government rebate money — the economic stimulus payments the Federal government is sending out after May 15. In general, they are people who filed a 2007 federal tax return and have an income of more than $3,000. The idea behind the government payment is to increase consumer spending and boost the national economy. Pat Swanson, Iowa State University Extension family resource management state specialist, advises taking time to plan how to use the rebate money.

“People should use the next couple of months to consider their family financial needs and how the rebate might help them achieve financial goals,” Swanson said. “For some families, saving the money or building an emergency fund would be in their best interest. For others, paying off high interest credit card debt or saving for an upcoming expense may be the best use.” 

File a 2007 federal tax return even if you have no tax liability. Only people who have filed a return will be eligible for the stimulus rebate. Stimulus payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Checks will be mailed to all other eligible taxpayers.

“People must file federal tax returns to get a rebate. Filing is made easy with Free File for those with an adjusted gross income of $54,000 or less in 2007,” Swanson said. “There also are locations across Iowa that provide free assistance filing returns.”

ISU Extension has information about free tax return assistance (www.extension.iastate.edu/finances/personal/taxsites.htm). AARP (www.aarp.org/money/taxaide)  has information on tax assistance, and the Iowa Department of Revenue (www.iowa.gov/tax/elf/elfchoic.html) has information on Free File. There are no additional forms to file in order to receive the stimulus payment. The IRS will calculate the payment and either direct deposit the amount or send a check.

To be eligible for the payment, a person must have had at least $3,000 of income from earnings, Social Security benefits or veteran’s disability benefits in 2007. Supplemental Security Income (SSI) does not count as qualifying income for the stimulus rebate. Also, a person who can be claimed as a dependent on another taxpayer’s return is not eligible for the payment.

The range of basic stimulus payments will be from $300 to $600 for individuals and $600 to $1,200 for married couples. In addition to the basic payment, families will receive an additional $300 per child if the child was younger than 17 years on December 31, 2007. The stimulus amounts will begin to phase-out at individual incomes of $75,000 and married couple incomes of $150,000.

“Financially stronger families are good for the national economy,” Swanson said. “If famiies plan for its use, the rebate can benefit personal finances, and consequently, improve the nation’s economy family by family.”

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