How online tax rebate work in stimulus package

If your 2008 federal tax liability is between $300 and $600 (single) or $600 and $1,200 (married), your rebate will be equal to whatever you paid in tax. Anyone who gets a rebate of any size will get an additional $300 for each child eligible for the child tax credit in 2009. To qualify, the child must be younger than 17 on Dec. 31, 2009. Higher-income people won't get anything.

The rebates - including the $300 rebate for kids - start to shrink when your adjusted gross income hits $75,000 (single) or $150,000 (married). Adjusted gross income includes income from all sources, but before most deductions and exemptions have been subtracted.

The rebate is reduced by $50 for every $1,000 you earn above the income limit. It disappears at some point which varies depending on your family size. Singles with more than $87,000 in gross income and couples with more than $174,000 get no rebate if they have no children. Those with children can earn a bit more before losing their rebate because it's bigger to start out with.

Rebates will not be sent to nonresident aliens (you must have a Social Security number to get a rebate), estates, trusts or people who are or could be claimed as a dependent on someone else's tax return. That means most high school and many college students won't get a rebate even if they earn more than $3,000 or pay taxes.

The rebates represent a 2009 tax cut. But instead of getting the tax cut next year, when you file your 2009 return, you'll get it this year. The IRS, however, will use your 2008 tax return to determine who gets a rebate and how much.

If it turns out that you would have gotten a bigger tax rebate based on your 2009 tax return, the IRS will refund you the difference. On the other hand, if you would have gotten a smaller rebate based on your 2009 return, you won't have to pay back the difference, says. Unlike the 2001 rebates, which went only to people who paid tax, the 2009 rebates will go to many people who don't file tax returns.

The IRS says it will work with the Social Security Administration and Department of Veterans Affairs to make sure all eligible individuals know how to get a rebate.Tax advisers are encouraging people who had more than $3,000 in income from a job or self-employment in 2008 to file a tax return even if they don't owe tax so the IRS knows how to find them. The IRS has been warning taxpayers not to fall for telephone or e-mail scams that use the rebate as bait.