May 16, 2008
Friday

Did the Internal Revenue Service forget your kids?

For hundreds of parents expecting a $300-per-child stimulus payment, the IRS could still owe you.

Because of computer glitches and taxpayer filing errors, as many as 350,000 tax-paying parents nationwide were shorted the $300-per-child payment they're due under the federal government's stimulus payment plan.

If your family is among them, a catch-up check will be arriving in mid-July, IRS spokesman Terry Lemons said

"We're going in to make sure we correct the situation," Lemons said. "We appreciate everyone's patience during this."

Frustrated calls to the IRS from parents, tax preparers and others began popping up in the last two weeks, Lemons said, after the first direct-deposit stimulus checks started arriving in bank accounts -- but without the $300 allotments for kids.

Some of the errors occurred, Lemons said, because taxpayers filling out paper returns didn't check the child tax credit box.

"You could be in the situation where you make too much money to qualify for a child tax credit," Lemons said, "but you would still be eligible for the $300 stimulus payment for each child."

The confusion arises because the regular income tax guidelines for claiming children as a tax credit are different from those qualifying them for the stimulus payments.

On a 1040 federal tax form, for instance, if a taxpayer whose income was too high didn't check the box for a child tax credit, the IRS would not know they had a child eligible for a $300 stimulus payment.

Under the stimulus payment program, a qualifying child is a dependent who was younger than 17 as of December 2007.

Errors also occurred, Lemons said, due to glitches with some tax preparation software, mainly from two companies, CCH, based in Illinois, and Petz Enterprises Inc., based in California, both of which are used primarily by tax professionals. He said the problem was almost unheard of with large tax software companies like TurboTax or Intuit.

Lemons said a similar problem occurred during the last stimulus check program in 2003. Back then, parents who missed receiving their allotment had to wait until the next tax year to get reimbursed.

"That's the nice thing this time: There's nothing for the taxpayer to do," Lemons said. "We're identifying where the mistakes were made, and we're getting the check out to everyone."

In addition, he said, a letter will be going out explaining the errors and follow-up payment.

The IRS estimates that more than 99 percent of nearly 36 million returns eligible for child stimulus payments were filled out accurately by taxpayers, meaning that less than 1 percent will need the additional check mail-outs.

For details, go to www.irs.gov and click on "Economic Stimulus Payments: Most Frequently Asked Questions."

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Ketchikan, Alaska

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