Stimulating Talk: ESP and Financial Literacy Month
by Meg Newman
No not Extra-Sensory Perception, we’re talking about the Economic Stimulus Payments.
Beginning in May, the IRS will send Economic Stimulus Payment (ESP) checks to over 130 million households. Intended to spur a slowing economy, these payments represent many millions of dollars flowing into our communities.
Do you qualify for the check?
Even if you do not think you need to file your taxes this year, you might be eligible for the ESP check. If you received more than $3,000 from any of the following sources or a combination, you might be eligible to receive the ESP:
- Wages - you must have earned more than $3,000 in 2007 to qualify this year for the stimulus, but if your earnings are too low from 2007, you could still qualify for a check when you file your 2008 taxes if you earn more money this year. (Even if you earned less than $3,000 and are ineligible for the ESP, you may want to file a tax return for 2007 in order to reclaim any taxes that were withheld from your pay check. It is NOT too late! You can do this after April 15, for up to three years.)
- Social Security Disability Payments – only if they come from the Social Security Administration, SSI payments are not eligible.
- Social Security Retirement Benefits
- Veterans’ Benefits
- Railroad Pensions
The bad news: You must file a tax return to receive the ESP even if you would not normally need to file.
The good news: It’s not too late; you have until October to do it! And there is free help available.
Those who have already filed need to do nothing more! You should receive your check after May 15. The IRS will accept ESP returns until October 15.
The ESP amount ranges from $300 for those who receive Social Security or have a low tax liability to $600 for workers with a higher tax liability. Families will receive $300 additional dollars for each eligible child.
To help more people claim and keep the economic stimulus payment and any other tax benefits, the DC EITC Campaign and Community Tax Aid are hosting Super Stimulus Filing Days. On Saturday, April 19, from 10 a.m. to 2 p.m. eligible residents can come to the Martin Luther King, Jr. Memorial Library (Room A-9 in the basement) for assistance filing a tax return. These days are intended for people who are filing primarily to receive the ESP check. If you are not able to make it to MLK on April 19 or you work with a population likely to need assistance filing for the ESP, please contact info@dceitc.org or 202-419-1442 for information on other opportunities for assistance.
Make Smart Choices with your Refunds
Now that you’ve got this money coming to you, what are you going to do with it? With messages coming to us from all angles urging us to “buy new things” or “upgrade to a new model” there are scores of temptations to head to the mall with our tax checks in hand and make potentially unwise financial decisions.
Saving tip: Create a budget for your refund check. Set some aside for savings, another portion for debt, bills and critical purchases. Reserve just a small portion for a more frivolous or splurge item.
We all have needs and wish lists, but creating a budget for your refund check before it arrives will help you avoid spending your money on items you later regret.
Celebrate Financial Literacy Month
In honor of Financial Literacy Month in April, we challenge you to take a proactive step towards a brighter financial future. Your ESP check alone will not make or break the American economy, but it may have a significant impact on your financial well-being.
In addition to saving your refund and/or spending it carefully, consider joining DC Saves. This citywide coalition provides financial resources and information to help you reduce debt, increase savings, and build wealth. Tax refund time is the perfect opportunity for a free visit to a credit counselor or enrollment in a matched savings account. Membership in DC Saves is free. Visit www.dcsaves.org to sign up and learn more!
This regular financial column is presented by Capital Area Asset Builders. Send questions or feedback on this article to saving@caab.org. For more information about savings and Financial Literacy month, visit www.dcsaves.org, for information about free tax filing, visit www.dceitc.org.
