Rebates and higher-income earners
Updated: 2/28/2008Article ID: 5962
This is determined by a taxpayer's adjusted gross income, or AGI. That's total income minus certain adjustments, like IRA contributions.
Rebates are reduced starting at $75,000 AGI for single persons and $150,000 AGI for married couples. A rebate is decreased by 5 percent of AGI income over the limit.
Here's how it works:
A single woman, who pays more than $600 in taxes, would in theory qualify for a $600 rebate. But if her AGI is $80,000, and therefore above the $75,000 limit, her rebate is reduced by $250 (that's 5 percent of the $5,000 over the limit). She would get a rebate of $350.
A married couple with two children, who pay more than $1,200 in taxes, are eligible for a rebate of $1,800 ($1,200 for the parents and $300 for each child). But if the couple's AGI is $160,000, and thus above the $150,000 limit, their rebate is reduced by $500 (or 5 percent of the $10,000 over the limit). The family would receive a rebate of $1,300.
A married couple with no children, who pay more than $1,200 in taxes, would in theory get a $1,200 rebate. But if their AGI is $180,000, they would get no rebate. (That's because 5 percent of the $30,000 over the limit is $1,500, which exceeds the $1,200 rebate).
