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Quick Facts: Fiscal Stimulus
Table 2. Advance Rebate Calculations for Married Taxpayers

The following examples assume that all income comes from earnings, Social Security, and veteran’s payments. Applicable income for advance rebates is that shown on 2007 tax returns. All units claim the standard deduction and only the regular personal and dependent exemptions.

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Underlying Data

Childless couple:
Income less than $3,000:no rebate
Income between $3,000 and $23,500:$600
Income between $23,500 and $29,500:$600 plus 10% of AGI over $23,500
Income between $29,500 and $150,000:$1,200
Income between $150,000 and $174,000:$1,200 less 5% of AGI over $150,000
Income $174,000 or higher:no rebate
Married couple with one child:
Income less than $3,000:no rebate
Income between $3,000 and $26,900:$900
Income between $26,900 and $32,900:$900 plus 10% of AGI over $26,900
Income between $150,000 and $180,000:$1,500 less 5% of AGI over $150,000
Income $180,000 or higher:no rebate
Married couple with two children:
Income less than $3,000:no rebate
Income between $3,000 and $30,300:$1,200
Income between $36,300 and $150,000:$1,800
Income between $150,000 and $186,000:$1,800 less 5% of AGI over $150,000
Income $186,000 or higher:no rebate
Married couples, more generally:
Income less than $3,000:no rebate
Income between $3,000 and Amount A:$600 plus $300 per child
Income between Amount A and Amount A plus $6,000:$600 plus $300 per child plus 10% of AGI over Amount A
Income between Amount A plus $6,000 and $150,000:$1,200 plus $300 per child
Income between $150,000 and Amount B:$1,200 plus $300 per child less 5% of AGI over $150,000
Income Amount B or higher:no rebate

Phase-in begins at Amount A = $23,500 plus $3,400 for each child
Phaseout ends at Amount B = $174,000 plus $6,000 for each child

Examples

  • Married couple with two children and $30,000 of earnings: rebate equals $1,200 (limited to their income tax liability before child and earned income credits) plus $300 for each child. Taxable income equals earnings of $30,000 minus a standard deduction of $10,700 minus four exemptions of $3,400 each, or $5,700. Their tax is 10 percent of that amount, or $570. Their rebate is thus $570 (the $1,200 maximum reduced to their $570 tax liability) plus $600 ($300 for each child), or $1,170.
  • Married couple whose only income is $30,000 of Social Security benefits: rebate equals $600 because the couple has more than $3,000 of income from Social Security. They do not qualify for the basic $1,200 benefit because they have no income tax liability.
  • Married couple with $2,500 of Social Security benefits and $10,000 of investment income: the couple qualifies for no rebate. Their income from earnings, Social Security, and veteran’s payments is less than $3,000 and they have no income tax liability.
  • Married couple with two children and adjusted gross income of $175,000: their rebate of $1,800 ($600 for each spouse plus $300 for each child) is reduced by 5 percent of the amount by which their AGI exceeds $150,000. That excess equals $25,000, 5 percent of which is $1,250. Their rebate is thus $1,800 minus $1,250, or $550.
  • Married couple with two children and adjusted gross income of $200,000: their rebate of $1,800 ($600 for each spouse plus $300 for each child) is reduced by 5 percent of the amount by which their AGI exceeds $150,000. That excess equals $50,000, 5 percent of which is $2,500. They get no rebate because the $2,500 reduction exceeds their maximum benefit of $1,800.


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