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Examples of 2008 Recovery Rebates for Single Taxpayers

Single mother with two children and $22,050 of earnings: rebate equals $600 (limited to her income tax liability before child and earned income credits) plus $300 for each child. Her taxable income equals her earnings of $22,050 minus a standard deduction of $7,850 minus three exemptions of $3,400 each, or $4,000. Her tax is 10 percent of that amount, or $400. Her rebate is thus $400 (the $600 maximum reduced to her $400 tax liability) plus $600 ($300 for each child), or $1,000.

Single elderly individual whose only income is $20,000 of Social Security benefits: rebate equals $300 because the individual has more than $3,000 of income from Social Security. She does not qualify for the basic $600 benefit because she has no income tax liability.

Single individual with $2,500 of veteran’s payments and $5,000 of investment income: the individual qualifies for no rebate. His income from earnings, Social Security, and veteran’s payments is less than $3,000 and he has no income tax liability.

Single father with two children and adjusted gross income of $85,000: her rebate of $1,200 ($600 for her plus $300 for each child) is reduced by 5 percent of the amount by which her AGI exceeds $75,000. That excess equals $10,000, 5 percent of which is $500. Her rebate is thus $1,200 minus $500, or $700.

Single mother with two children and adjusted gross income of $100,000: her rebate of $1,200 ($600 for her plus $300 for each child) is reduced by 5 percent of the amount by which her AGI exceeds $75,000. That excess equals $25,000, 5 percent of which is $1,250. She gets no rebate because the $1,250 reduction exceeds her maximum benefit of $1,200.