Tax Stimulus Checks

What military families can expect. 

By Laura Stack, Chief Financial Officer for Pioneer Services, a Division of MidCountry Bank

Starting May 2008, more than 130 million Americans will receive checks as part of the “economic stimulus package” passed by Congress. Ranging between $300 to more than $1,200 depending on filing and family status, the money is aimed at jump-starting the economy.

Military families are eligible to get stimulus checks, but there are a few things they need to know and procedures to follow in order to get them.

Rules for eligibility

To qualify, service members must file a tax return—many military families have not had to file a federal tax return due to tax-exempt pay that puts them below the income threshold. But they will need to do so this year if they want a stimulus check 

The Internal Revenue Service (IRS) explains how this works for military families:

• File a Form 1040A with the IRS
• Report nontaxable combat pay on Line 40b of the Form 1040A to show at least $3,000 in qualifying income (combat pay will be in Box 12 of the W-2 form, along with the designation “Code-Q”).
• The IRS is also setting up a service through its Free File Alliance just for this purpose. To find out more, go to www.irs.gov and click on “Rebate Questions at the top of the page.

In other words, even though many military families may not have had to file taxes previously, they will need to this year if they want a stimulus check. 

Receiving the check

The IRS has set up a schedule of when checks will be sent to those who file their taxes by the April 15 deadline. The dates depend on whether they selected direct deposit or paper check, as well as the last two digits of their Social Security numbers (SSN):

Direct Deposit Payments 

SSN            Date

00 – 20             May 2

21 – 75             May 9

76 – 99             May 16

Paper Check

SSN            Date

00 – 09             May 16

10 – 18             May 23

19 – 25             May 30

26 – 38             June 6

39 – 51             June 13

52 – 63             June 20

64 – 75             June 27

76 – 87             July 4

88 – 99             July 11

Note that the IRS allows numerous filing extensions for military families. But to get a check on one of the days above, service members must have their returns filed by April 15, 2008. If they want to get a check at all this year, their taxes must be filed by Oct. 15, 2008. And if they miss either of these dates, they can actually get the stimulus check next year by following the same process.

How to get the check on time

The following actions can help military families receive their stimulus checks on time: 

• File early—The key is to file by the April 15, deadline. Those that miss the deadline will be moved to the back of the line and will get their checks some time after July 11 (when the last checks are sent to those who filed on time).
• Get it right the first time—Those that have errors on their returns will have to re-file and be sent to the back of the line, so it’s imperative that everyone makes sure their returns are correct.
• File electronically—It’s much easier for the IRS to process electronic returns, and it is encouraging filers to do so.
• Provide direct deposit information—Use direct deposit to get the money faster, since it takes longer for the IRS to mail a check. Make sure the account information is correct and the account still valid.
• Do not ask for a split deposit—The IRS can only deposit a stimulus check into one account. Those who want the money split up and sent to different accounts will have to get a regular check and deposit the money themselves.
• Check the address—Those who have moved in the last year need to file Form 8852 with the IRS to inform them of the change in address. This is especially important for those receiving a regular paper check.

Following these simple steps can help military families receive their tax stimulus checks in a prompt manner, and make the entire process go easier.

About Laura Stack

Laura Stack, Chief Financial Officer for Pioneer Services, has more than 20 years experience in finance in the financial services, leasing and media sectors. A graduate of Kansas State University, Stack is a member of several professional and military organizations, including the Central Exchange and Financial Executives International, and the Association of the United States Army.

For more information, visit pioneerservices.com. For loan information, visit pioneermilitarylending.com.