IRS: Stimulus payment deadline nears

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By Jennifer DeWitt | Monday, October 6, 2008 8:57 PM CDT | () comments

The clock is quickly ticking down for the tens of thousands of Iowa and Illinois residents who have not filed a 2007 income tax return to receive a federal economic stimulus payment.

According to the IRS, Americans must file a tax return by Oct. 15 in order to receive the stimulus payment. An estimated 4.3 million Americans may still be eligible for the payment, but have not filed tax returns.

An estimated 37,126 retirees and disabled veterans in Iowa as well as 153,000 retirees and disabled veterans in Illinois also fall into this group. In fact, Illinois is in the top 10 states — ranked at No. 7 — with unclaimed payments. The 153,000 Illinois taxpayers could be eligible for a payment out of the $45.9 million yet to be claimed.

IRS spokesman Christopher Miller said the majority of those who have yet to file are believed to be seniors, disabled veterans and low income. “People who normally file their tax returns didn’t have to think twice about it. The payment was automatically calculated and issued (when they filed).”

But there was more of a learning curve for seniors, veterans and low income individuals who typically would not file because they do not make enough money to file or their income might not be taxable, he added.

Nationally, about 21 percent of the people believed to be eligible have not filed a tax return.

“We still haven’t heard from approximately 18 percent of the Iowa seniors and veterans in this category,” Miller added. “Most of these folks are 65 or older. They may have money waiting for them and we want them to have it.”

In Iowa, Davenport is among the top five cities with the highest number of potentially eligible seniors and vets who have yet to file. According to the IRS, the breakdown by city of those who may be eligible but have not filed: Des Moines, 3,399; Davenport, 1,547; Cedar Rapids, 1,506; Sioux City, 1,148; and Waterloo, 1,090.

The Economic Stimulus Act of 2008, signed into law Feb. 13 by President Bush, provided for stimulus payments of up to $600, ($1,200 for married couples) or the amount of the taxpayer’s 2007 net income tax liability, whichever is less. There also is a $300 payment for each eligible child younger than 17.

Those who have no tax liability and are not required to file a tax return because their income is too low or nontaxable are eligible for a stimulus payment of up to $300 ($600 for married couples), plus the $300 payment for each qualifying child.

To receive a payment, taxpayers must have a valid Social Security number, $3,000 of qualifying income from earned income, nontaxable combat pay as well as certain benefits from Social Security, Veterans Affairs and Railroad Retirement. Qualifying income from Social Security includes retirement, disability and survivor benefits. Supplemental Security Income is not a qualifying income.

In addition, Miller said the estimated 10 million taxpayers nationwide who filed an extension from the April 15 tax deadline also now face Oct. 15 as the final deadline to avoid any penalties and to also receive the stimulus payment.

As of Sept. 30, the IRS had issued a total of 116 million payments, totaling $94 billion. “We’re expecting to issue about 124 million payments,” he said, adding that the total amount was not available. Payments began going out April 28.

“We’re doing a very good job of reaching out to people,” he said pointing to the fact that nationally, 80 percent of the recipients have been accounted for.

By law, the IRS will not be able to disperse any payments after Dec. 31. However, people who may be eligible for an economic stimulus payment can claim a credit in 2009 on their 2008 income tax return.

At a glance

To receive a federal economic stimulus payment, you must file a 2007 federal tax return by Oct. 15.

Anyone still needing the proper form, Form 1040A, can go online to IRS.gov and download a sample form, instructions and a blank form. Forms also are available at local IRS offices.

If you have filed and want to check the status of your payment, go to “Where’s My Economic Stimulus Payment?” at IRS.gov.

The status also can be checked by calling 1-866-234-2942 and pressing 2. You will need your Social Security number (the one listed first on the 2007 return), filing status and the number of exemptions claimed on the return.

Source: IRS

Jennifer DeWitt can be contacted at (563) 383-2318 or jdewitt@qctimes.com. Comment on this story at qctimes.com.