Dispatch reporter Bruce Smith
Photo courtesy of Guustaaf Damave
Eatonville Dispatch Reporter Bruce Smith penned a fabulous article last week titled “Your ‘Economic Stimulus’ check explained – sort of”
The Graham-based reporter began his story in The Dispatch as follows:
“Starting in May, most American households will be receiving a check from Uncle Sam as part of the economic stimulus package recently authorized by Congress.
However, the confusion surrounding this money is reaching proportions unseen in recent memory.
To begin, everyone will be getting a slightly different amount because the dollar figure will be based on their 2007 taxes actually paid, their tax bracket and the types of deductions they declared.
But worse, and contrary to popular opinion, it is not “free money,” but merely an advance on the refund that you might be getting next year from your 2008 taxes…
Thanks to Wilma Bennett of the GBA, and Bob Riler, of the Pierce County Department of Aging and Long-Term Care, for help in understanding this program.”
Mr. Smith sent this clarification on his story to the Yelm Community Blog:
“Yes. The recent Dispatch article on Uncle Sams Economic Stimulus Payment was incorrect.
The check that tax payers, and selected pensioners, will be receiving in May is free money in the sense that it is a bonus payment from the government It is not merely an advance on a 2008 tax year refund, as was written in the April 9th issue of the Dispatch.
According to Wilma Bennett, a Graham-based accountant and tax expert, the payment is an advance on a tax credit applicable to 2008 federal income taxes.
As a tax credit, however, you only get the money if you owe taxes for 2008. Nevertheless, many individuals will also be getting a payment in a kind of piggy-back deal: ie: folks who dont ordinarily pay taxes because all their income is derived through governmental benefits such as VA benefits or social security pensions. These folks will be getting a payment, too, as will folks whose income did not generate any liabilities, such as people with enough deductions to drive their taxes to zero..
In addition, the advance is a refundable tax credit, meaning that you do not have to pay back Uncle Sam if you have no tax liabilities next year.
Further, whatever tax refund you might be entitled to next year – based upon your 2008 income, deductions and tax bracket – you will receive that refund in full. This years stimulus payment is awarded to you as additional money. Nor will it be subject to taxes next year.
Lastly, if your tax liability increases next year, you might receive a second stimulus payment if your first one this year was less than the maximum.”