How to Get a Tax Rebate or Tax Refund

The terms “tax rebate” and “tax refund” are often used interchangeably, but they are different. A tax refund is issued when a taxpayer pays more in taxes throughout the year than they owe, which is determined by the final calculation on an annual tax return. This overpayment can happen through payroll withholding or estimated tax payments. In contrast, a tax rebate is a separate payment authorized by the government, often to stimulate the economy, and is not tied to an overpayment of taxes.

Maximizing Your Tax Refund Through Credits and Deductions

You can increase your tax refund by using tax credits and deductions to lower your tax liability. Deductions reduce your taxable income, while credits reduce your tax bill on a dollar-for-dollar basis. Some credits are refundable, meaning you can receive the full amount as a refund even if you owe no income tax.

The Earned Income Tax Credit (EITC) is a refundable credit for low- to moderate-income working individuals and families. For the 2024 tax year, the credit can be worth up to $7,830 for a family with three or more children. Eligibility depends on earned income and adjusted gross income (AGI) falling within specific limits, and investment income must be $11,600 or less. Taxpayers without a qualifying child must be between 25 and 65 to claim the EITC.

The Child Tax Credit (CTC) is worth up to $2,000 for each qualifying child under 17 for the 2024 tax year. A portion of this credit is refundable through the Additional Child Tax Credit (ACTC), allowing a refund of up to $1,700 per child. To qualify, the child must be your dependent and have a Social Security number. The credit phases out for individuals with a modified AGI over $200,000, or $400,000 for married couples filing jointly.

The American Opportunity Tax Credit (AOTC) offers up to $2,500 per student for the first four years of higher education. Up to 40% of the credit, or $1,000, is refundable. To claim the full credit, your modified AGI must be $80,000 or less ($160,000 for joint filers), with a reduced credit available for incomes up to $90,000 ($180,000 for joint filers). The student must be pursuing a degree and enrolled at least half-time.

Qualifying for Special Government Rebates

The federal government sometimes issues one-time tax rebates, authorized by legislation like the CARES Act, in response to national economic conditions. Unlike a refund from overpayment, a rebate is a direct payment intended to provide financial relief or stimulate economic activity.

Eligibility for federal rebates is determined by adjusted gross income (AGI), filing status, and the number of dependents from a recent tax return. For example, past Economic Impact Payments were sent to individuals, heads of household, and married couples with AGI below certain thresholds. The payment amounts were then reduced for those with incomes above these limits and often varied based on the number of qualifying dependents.

In addition to federal actions, some state governments may issue their own rebates. These programs are not uniform and depend on legislation passed within that state. Taxpayers should monitor announcements from their state’s department of revenue for information on available local rebate programs.

The Process of Filing to Receive Your Payment

To claim a tax refund or a rebate tied to filing, you must submit a tax return. Many people use commercial tax software or hire a tax professional, such as a Certified Public Accountant (CPA), to prepare and file the return.

The IRS also offers free filing options. The IRS Free File program is a partnership with tax software companies that allows taxpayers below a certain income threshold to e-file their federal return for free. For those with incomes above this threshold, Free File Fillable Forms are available, which are electronic versions of paper IRS forms.

Providing bank account information for direct deposit is the fastest way to receive your money. When filing, you will need to enter your bank’s routing number and your account number. This allows the Treasury Department to deposit the funds directly into your account, which is faster and more secure than receiving a paper check in the mail.

In some cases, individuals not normally required to file a tax return may be eligible for a special rebate. For past stimulus payments, the IRS created a non-filer tool to register for payment. This provided a simplified way to enter basic details without completing a full Form 1040.

Tracking and Receiving Your Money

After filing, you can monitor your refund’s status using the IRS’s “Where’s My Refund?” tool on the IRS.gov website and the IRS2Go mobile app. You will need your Social Security number or ITIN, your filing status, and the exact refund amount from your return. The status is available within 24 hours after the IRS accepts your e-filed return.

The tool displays your refund’s progress through three stages: Return Received, Refund Approved, and Refund Sent. The information is updated once every 24 hours. For paper-filed returns, status information may not be available for four weeks or more.

The delivery time for your money depends on the method you chose. Direct deposit is the fastest option, with most refunds issued in less than 21 days from when the return is accepted by the IRS. If you opted for a paper check, it will be mailed to the address on your tax return and can take several weeks to arrive.

If your refund takes longer than 21 days to arrive after e-filing, it may be because your return requires further review. The IRS will contact you by mail if it needs more information. You should only call the IRS if the “Where’s My Refund?” tool instructs you to do so or if more than 21 days have passed since you e-filed.