IRS warns of tax preparer mistake

KSDK -- The IRS said it is getting reports that some tax preparers are telling customers that the Economic Stimulus Payment they received in 2008 is taxable. The IRS wants to remind you this is not true.

The IRS said the Economic Stimulus Payments issued by the IRS in 2008 are not taxable federally and will not reduce your 2007 or 2008 refund or increase the amount you owe when you file your 2008 return.

IRS officials believe tax preparers are becoming confused because the tax software for 2008 asks filers to report the amount of Economic Stimulus Payment they received in 2008, not because that amount is taxable income, but to determine if the filer is eligible for the new Recovery Rebate Credit -- which serves as a sort of "second chance" at getting a stimulus payment.

Taxpayers who did not receive an Economic Stimulus Payment in 2008, or did not receive the full amount, may be eligible for a Recovery Rebate Credit of up to $600 per individual or $1200 per married couple filing jointly.