Economic Stimulus rebate question

[rickier55]

I've been looking at the text of HR5140, the House legislation on the stimulus package. I was trying to find the wording of qualifying individuals with respect to income limits, Pensions and social security.

It's been widely reported the it excludes those whose sole income is income is Social Security (unless they have more than 3000 of earned income). I know the Senate was considering changing that.

However, I found the text of the House legislation, and I cant see where they necessarily exclude Social Security recipients.

Specifically I'm looking at the definitions below

I notice that the qualifying clause for a tax payer says earned income of 3000 ..OR tax liability .....not earned income of 3000 AND tax liability...

So how does this exclude recipients of Social Securtiy?

Thanks,
Rick

>>>>>>>>>>>>>>>>>>>>

• `(b) Special Rules-

• • `(1) IN GENERAL- In the case of a taxpayer described in paragraph (2)--

• • • `(A) the amount determined under subsection (a) shall not be less than $300 ($600 in the case of a joint return), and

• • • `(B) the amount determined under subsection (a) (after the application of subparagraph (A)) shall be increased by the product of $300 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.

• • `(2) TAXPAYER DESCRIBED- A taxpayer is described in this paragraph if the taxpayer--

• • • `(A) has earned income of at least $3,000, or

• • • `(B) has--

• • • • `(i) net income tax liability which is greater than zero, and

• • • • `(ii) gross income which is greater than the sum of the basic standard deduction plus the exemption amount (twice the exemption amount in the case of a joint return).

• `(c) Treatment of Credit- The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.

• `(d) Limitation Based on Adjusted Gross Income- The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).

• `(e) Definitions- For purposes of this section--

• • `(1) NET INCOME TAX LIABILITY- The term `net income tax liability' means the excess of--

• • • `(A) the sum of the taxpayer's regular tax liability (within the meaning of section 26(b)) and the tax imposed by section 55 for the taxable year, over

• • • `(B) the credits allowed by part IV (other than section 24 and subpart C thereof) of subchapter A of chapter 1.

• • `(2) ELIGIBLE INDIVIDUAL- The term `eligible individual' means any individual other than--

• • • `(A) any nonresident alien individual,

• • • `(B) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, and

• • • `(C) an estate or trust.

• • `(3) EARNED INCOME- The term `earned income' has the meaning set forth in section 32(c)(2) except that--

• • • `(A) subclause (II) of subparagraph (B)(vi) thereof shall be applied by substituting `January 1, 2009' for `January 1, 2008', and

• • • `(B) such term shall not include net earnings from self-employment which are not taken into account in computing taxable income.
    • >>>>>
    • >>>>>>>>>>>>>>>>>>>>

[Zoocat]

I had not read about the social security exclusion. I think we all have questions about this "rebate." Since it's still under consideration and the Senate has some "revisions", we'll have to wait until it passes, sometime in mid-February, they estimate.

[FinanceDude]

Quote:

Originally Posted by Oldbabe I had not read about the social security exclusion. I think we all have questions about this "rebate." Since it's still under consideration and the Senate has some "revisions", we'll have to wait until it passes, sometime in mid-February, they estimate.

By revisions, do you mean "watering down",or "adding a bunch of stuff in the dead of night that will come back to haunt Joe taxpayer"

[jazztbone]

So, if I pay no income tax, I get $300. If I pay $50k income tax, I get squat?! Why don't they just call it what it is, a handout, not a rebate!

[retire@40]

That's the problem with this. It's more like direct wealth redistribution by the government. This happens all the time, but this transaction is getting more publicity.

A better name for this would be the "Robin Hood" rebate.

I can understand how the guy paying a lot in taxes and getting none of it back would get frustrated.

Classic case of punishing the rich and rewarding the poor.

[boont]

"If you had no earned income but you paid taxes-perhaps on Social Security or pension benefits or investment income-you could receive a refund of your 2007 tax liability up to $600 (single) or $1200 (married).

If you had no earned income and no tax liability in 2007, you would get no refund under the existing proposal. However, the Senate is trying to amend the bill so senior citizens living off Social Security could get a refund."

Kathleen Pender, Net Worth

[Zoocat]

Quote:

Originally Posted by FinanceDude By revisions, do you mean "watering down",or "adding a bunch of stuff in the dead of night that will come back to haunt Joe taxpayer"

It passed the House, now goes to the Senate that wants to add "stuff" like including seniors on social security and also extending unemployment insurance. And you're right about it coming back to haunt us. But probably not current Joe taxpayers, more likely the ones who can't vote yet. We're not even in a recession yet and this won't do squat to keep us out of one.

Ok. That's the end of my rant.

The Associated Press: Stimulus Package Will Boost Deficit