Stimulus ... SE Income

[Ray in Ohio]

I have several amish clients who are self employed and have over $3000 in Schedule C or F income. These clients are exempt from paying SE tax by filing a Form 4029. Thay also have no taxable income after deductions so they are not paying any income tax. The IRS calculator is processing the rebate checks based on the information from Schedule SE. In these cases there is no schedule SE and therefore the IRS computers are not catching the self employed income on these returns and therefore there are no rebate checks being issued.

It is my understanding that the rebate check qualifications are over $3000. in SE income. I have not been able to find anything stating that it does not qualify as 'qualifying income' if it is not subject to SE tax for the above reason.

If anyone has experienced this situation or anyone has more information or has the urge to dig up more information, I would love to hear from you. I have called the IRS numerous times, and the agents I talk to do not know anything about this form 4029 and therefore are unable to provide an educated answer.

Many thanks to anyone with any information.

[mcb39]

If you don't owe any income tax, you will not receive a stimulus check; nor will you receive a check in excess of any amount that you owe under $600/$1200/$300. This has been a common misconception and a reason for at least a gazillion calls re: "Where is my check? They said......!!!!!!!"

[taxit]

The government is reminding people to file a tax return even if they normally do not need to. Because if they have qualifying income, at least $3000 SS, they will recieve a stimulus payment. These people would not have a tax liability but still get the stimulus.

[jainen]

>>I have not been able to find anything stating that it does not qualify as 'qualifying income' if it is not subject to SE tax for the above reason.<<

Although it takes a few steps, it is not really difficult if you look at the law itself. Start with the Heroes Earnings Assistance and Relief Tax Act of 2008 which establishes the stimulus rebate. It says "earned income" is defined in Section 32 (c )(2) of the tax code, which says it means "net earnings from self employment" as defined in Section 1402, which says earnings from a "trade or business."

But Section 1402(c )(6) excludes from the term “trade or business” any work performed while an exemption under Section 1402(g) is in effect. That is the exemption your Amish clients have obtained.

In other words, "net earnings from self employment" means EXACTLY the same thing for the stimulus rebate as it means for self employment tax. If it isn't on Line 3 of Schedule SE, it isn't qualifying income.

[mcb39]

The government is reminding people to file a tax return even if they normally do not need to. Because if they have qualifying income, at least $3000 SS, they will recieve a stimulus payment. These people would not have a tax liability but still get the stimulus.

Your key word is "qualifying Income". People who are on SS are another story entirely. Refer to Jainen's post above for details. My point was simply that if you have earnings (other than SS) and end up with no tax liability after exemptions and deductions; you will not receive a stimulus check. This bill had so many qualifiers and disqualifiers that the general public was not aware of or did not understand; which is what caused mass confusion. In my own case, I had earnings in addition to SS. Because my husband and I ended up owing only SE tax; we only received the stimulus payments for SS; which was $300 each.

[jainen]

>>People who are on SS are another story entirely<<

There is only one story, and I don't find it to be particularly full of "qualifiers and disqualifiers." Since your tax liability was eliminated by deductions and exemptions, a minimum rebate amount was based on qualifying income which could be wages or SE as well as Social Security and VA. Assuming earnings were at least $3000, your joint return would have generated the same rebate amount even without Social Security.

[Burke]

If you don't owe any income tax, you will not receive a stimulus check; nor will you receive a check in excess of any amount that you owe under $600/$1200/$300. This has been a common misconception and a reason for at least a gazillion calls re: "Where is my check? They said......!!!!!!!"

Actually, this statement is incorrect. Originally, the bill started out this way. It was supposed to be an income tax "rebate." But it got modified. Persons who have at least $3,000 in SS, VA benefits, or net self-employment income as shown on Form SE, or wages on a W-2, etc. but do not owe any income tax WILL qualify.