Regarding stimulus payment, help me understand Net Income Tax Liability

May 10, 2008 2 Replies
I

I am married, filed jointly, and have two young children. I thought I'd get a stimulus payment of $1800. 600+600+300+300.



I actually only got $1200, and I'm wondering if someone can help explain. What is net income tax liability?



We are a fairly standard family. (What exactly is a standard family?) We paid taxes throughout the year, a little bit more than needed. And we have the mortgage. We got a tax refund, so we got money coming in, instead of having to pay out, to settle the tax bill.



But what part of that calculation is the 'net income tax liability' and what would make a working family have a low one (under $1200?)



I like CD's and fixed-rate mortages because they are simple. I'm not dumb, but I don't know fancy financials. Thanks for helping this money-moron figure out about the net income tax liability.



DougB


==================================================>From the IRS website:



Many, but not all, taxpayers qualify for the maximum basic payment of $600 for singles or $1,200 for married couples. Many parents are also receiving an additional $300 for each qualifying child, born after Dec. 31, 1990.



Your payment may be less than the maximum for one or more of the following reasons:



You are married and your net income tax liability is less than $1,200. ================================================== ========================================= MODERATOR'S COMMENT:



- smart enough to ask is smarter than most.


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P

For purposes of the stimulus credit "net income tax liability" is the total of lines 52 and 57 of your 2007 1040. I would guess that yours was less than $600 but you had more than $3,000 of wage income. Thus your payment would be the $600 minimum for a joint return plus $300 for each child.

The current payments are actually an advance payment of a 2008 tax year credit. If your 2008 return, using the same calculations, entitles you to more than $1200 you'll get the rest of it as a refundable credit on your

2008 return.
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C

The following also is from the IRS website- a little farther down from the information you found:

=========== Your net income tax liability is one of the following:

On Form 1040, the amount shown on Line 57 plus the amount on Line 52; On Form 1040A, the amount shown on Line 35 plus the amount on Line 32; or On Form 1040EZ, the amount on Line 10.

NOTE: Net income tax liability is not the same as the amount of tax withheld from your pay, the amount of your refund or the balance due on your return.

============ Hopefully the text I pasted above clears up your confusion. You will receive Notice 1378 via snail mail explaining how your ESP was calculated in about a week to 10 days. If you still believe IRS shorted you on your stimulus payment after reviewing the notice, you will need to contact IRS. IRS is aware that a few stimulus payments were issued without the correct amount calculated for dependents. IRS has posted an alert message internally advising its customer service assistors to input a manual adjustment to allow any additional amount due when these types of underpayments are identified.

Condor

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