UPDATE: More Retirees May Be Eligible For Stimulus Payment:

MAY 2, 2008: When the economic stimulus package was signed by President Bush on February 13, Association staff began reviewing information, released by the Internal Revenue Service, detailing the new federal law. Based on our reading of the IRS material at that time, we believed that public retirees could not use their pension income in order to qualify for the stimulus payment.

Since February, the IRS has been updating its information on the stimulus package, and our Association has been monitoring these developments. More recent IRS updates appear to show that public pensions may enable retirees to receive stimulus payments. Here’s why.

As we’ve explained in earlier reports, a retiree can qualify for the stimulus payment if in 2007, they have at least $3,000 in specific forms of qualifying income, including Social Security, earned income (i.e., wages, salaries), Railroad Retirement and certain VA benefits. Under this scheme, public pensions would not be included as qualifying income, and a public retiree would not receive a stimulus check if they did not receive at least $3,000 of Social Security or the specific income types mentioned above.

“After reviewing recent IRS updates, it appears that there is a second way that a public retiree could receive a stimulus payment, namely by owing a 2007 federal income tax,” reports Association Counsel Bill Rehrey. “I say ‘appears,’ because we are double, triple, checking our facts, at this time, in order to make absolutely certain they’re correct and avoid any further confusion whatsoever on this complicated issue.

“Having said that, we’re comfortable in notifying our members that if they paid 2007 taxes on pensions, annuities, IRAs and other retirement income, as well as their investments, they could be eligible. They would be even though they did not receive Social Security, earned income, Railroad Retirement or VA benefits.”

Most members had to file a 2007 federal income tax return in order to report their pensions, as well as other retirement and investment income, and pay taxes on that income. Therefore, under this second way to qualify (by owing federal taxes), there is a very good chance that they will receive the stimulus check –a minimum of $300 ($600 for a couple) up to a maximum of $600 ($1,200 for a couple).

“Again. we continue to monitor and review the situation, to ensure that we give our members the most accurate information possible,” continues Rehrey. “Since (stimulus) checks are being mailed at this time, we felt obliged to issue this release now, so that members would not think that they received a check by mistake.

“Unfortunately, there will still be members who do not receive a check because they’re not receiving Social Security and don’t file a federal tax return. But, under this second option (by owing federal taxes), a sizable number of members and public retirees will get a check.”

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