WASHINGTON - The checks are not in the mail, but they will be soon.
President Bush signed legislation yesterday to rush rebates ranging from $300 to $1,200 to millions of people, the centerpiece of government efforts to brace the wobbly economy. First, though, the 2007 tax returns must be filed.
More than 130 million people are expected to get the rebates, starting around May. Congress, Bush, the Federal Reserve, and Wall Street are hoping the money will burn such a hole in people's pockets that they won't be able to resist spending it. And the spending is supposed to give an energizing jolt to a national economy that is in danger of toppling into a recession if it has not already.
Whether people actually spend the money remains to be seen. A recent Associated Press-Ipsos poll indicated that most people have other plans. Forty-five percent said they planned to pay off bills, while 32 percent said they would save or invest it. Only 19 percent said they would spend their rebates.
The measure Bush signed - a $168 billion rescue package Congress approved last week with lightning speed - includes not only rebates for individuals, but also tax breaks for businesses to spur investment in new plants and equipment. That, too, would help bolster US economic activity. The package also contains provisions aimed at helping struggling homeowners clobbered by the housing collapse and the credit crunch refinance into more affordable mortgages.
Bush, who called the measure "a booster shot for our economy," praised the bipartisan cooperation. "We have come together on a single mission, and that is to put the people's interests first," he said.
Who gets a rebate? Most people who pay taxes or earn at least $3,000, including through Social Security or veterans' disability benefits. Single taxpayers making more than $75,000 and couples whose income tops $150,000, however, will get smaller checks, up to the top limits for any rebate: incomes of $87,000 for individuals and $174,000 for couples.
To get rebates, taxpayers must file a 2007 return and have valid Social Security numbers. People who have already filed their 2007 returns do not have to do anything extra, the IRS said.
Most taxpayers will receive a check of up to $600 for individuals and $1,200 for couples, with an additional $300 for each child.
People earning too little to pay taxes but at least $3,000 - including elderly people whose only income is from Social Security and veterans who live on disability payments - will get $300 if single or $600 if in a couple.
The IRS will send out rebates by mail or by direct deposit into bank accounts.
The rebates are in addition to any regular tax refund.