If you are a US taxpayer, here is an interesting item. On February 28 the IRS announced that more than 130 million American households will begin receiving Internal Revenue Service letters this week reminding them to file a 2007 tax return in order to receive a 2008 economic stimulus payment. The mailings by the IRS will begin the first week in March and continue throughout the month. The informational notice, titled Economic Stimulus Payment Notice, alerts people that they may be eligible for a one-time stimulus payment of up to $600 ($1,200 for a married couple filing jointly) starting in May. There also is a $300 per child payment for qualifying children younger than 17. "This special letters remind people that they won't need to do anything more than file a 2007 tax return in order to put the stimulus payment process in motion," Acting IRS Commissioner Linda Stiff said. The notice is informational and does not seek any financial information. The main mailings, which will take place in three weekly batches, will go to taxpayers who filed a tax return last year. "To receive a payment in 2008, individuals who qualify will not have to do anything more than file a 2007 tax return. The IRS will determine eligibility, figure the amount and send the payment," the notice states. "This payment should not be confused with any 2007 income tax refund that is owed to you by the federal government. Income tax refunds for 2007 will be made separately from this one-time payment." Most people with a 2007 US net income tax liability will qualify. This includes most people who get tax refunds. However, some people must take an extra step this year to receive a stimulus payment. In late March, the IRS will send a special mailing to certain recipients of Social Security and Veterans Affairs benefits. Generally, those benefits are nontaxable and recipients do not file tax returns. In order to receive a stimulus payment, people in this group need to file a tax return if they have at least $3,000 from a combination of certain Social Security benefits, Veterans benefits and earned income. The minimum stimulus payment for these people is $300 ($600 for a married couple filing jointly). You won't get a stimulus payment in 2008, if any of the following apply to you: â€¢ You don't file a 2007 tax return. â€¢ Your net income tax liability is zero and your qualifying income is less than $3,000. To determine your qualifying income, add together your wages, net self-employment income, nontaxable combat pay, Social Security benefits, certain Railroad Retirement benefits and certain veterans' payments. â€¢ You can be claimed as a dependent on someone else's return. For example, this would include a child or student who can be claimed on a parent's return. â€¢ You do not have a valid Social Security number. â€¢ You are a nonresident alien. â€¢ You file Form 1040NR or Form 1040NR-EZ, Form 1040PR or Form 1040SS for 2007. Essentially, there are two parts to the stimulus payment: a basic amount based on tax liability, filing status or other qualifying factors if there is no tax liability; an additional amount based on whether a qualifying child is reported on the return. Basic Amount of Payment: Taxpayers who had a net income tax liability will receive a payment, unless they can be claimed as dependents on someone else's return, are high-income individuals or do not have a valid Social Security number. The payment is equal to the taxpayer's net income tax liability, but no more than $600 for a single person or $1,200 for a married couple filing a joint return. The minimum payment is $300 for a single person or $600 for a married couple filing jointly. Eligible taxpayers who qualify for a payment may receive an additional $300 for each qualifying child. To qualify, a child must be under age 17 as of December 31, 2007. The stimulus payment - both the basic component and the additional funds for qualifying children - begins to phase out for individuals with adjusted gross incomes (AGI) over $75,000 and married couples who file a joint return with AGI over $150,000. The combined payment is reduced by 5 percent of the income above the AGI thresholds. Here are two examples of how the phase out works: â€¢ An individual with AGI of $80,000 and federal income tax liability in excess of $600 would qualify for a basic rebate of $600. Because this individual's AGI exceeds $75,000, however, his or her rebate is reduced by $250 (the credit is reduced by multiplying the amount of AGI over $75,000 by 5%). The taxpayer receives an economic stimulus payment of $350. â€¢ A married couple with two children, AGI of $160,000 and federal income tax liability before the child tax credit exceeding $1,200 qualifies for a basic rebate of $1,200 and an additional qualifying child credit of $600 for a total rebate of $1,800. But because the couple's AGI exceeds $150,000, their rebate is reduced by $500 (the amount of AGI over $150,000 multiplied by 5%). The couple receives an economic stimulus payment of $1,300. The US Treasury Department will start sending out payments in early May. For more details, see the IRS Web site: http://www.irs.gov/irs/article/0,,id=177937,00.html. As always, consult experienced tax advisors in each country at an early stage in specific cases. email@example.com Leon Harris is an international tax partner at Ernst & Young Israel.