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U.S. ‘stimulus’ benefits reach qualified taxpayers

By Fili Sagapolutele PAGO PAGO, American Samoa (The Samoa News, Dec. 30, 2009) - American Samoa has paid out a little over US$13 million in rebate checks to local tax payers who qualified to receive such payment under last year’s federal economic stimulus law. All unused money will be returned to the U.S. government, according to federal law.

Based on provisions of the economic stimulus package, the U.S. Treasury Department sent to American Samoa a lump sum payment of US$20.4 million.

As of the end of September this year, American Samoa Government paid out US$13.2 million in rebate checks and there is about US$7.2 million left "and most of it will be returned sometime next year to the U.S. Internal Revenue Service as required," said Tax Office Manager Melvin Joseph.

He said Oct. 15, 2009 was the deadline to file for the tax rebate but an extension was given to those individuals serving in combat zones. That extension expires mid year, 2010.

"American Samoa will still have some individuals who qualify, who are serving in combat zones, but I don’t think we will get much," he said in a telephone interview yesterday.

"Any left over from the US$20.4 million is required to be returned to the federal government no later than Dec. 31st, next year," he said.

Under the federal stimulus package, an individual tax filer earning US$3,000 or more in income can get up to US$600 with a "minimum" of US$300. A couple receives up to US$1,200 with an additional US$300 per child, if the child qualifies under the child tax credit.This year, the U.S. government transmitted to American Samoa Government US$8.6 million as advance payment for the "Making Work Pay Credit" provision of the American Recovery and Reinvestment Act (ARRA) for distribution to qualified local tax payers.

Available for tax years 2009 and 2010, the Making Work Pay credit (or tax credit) is 6.2 percent of a taxpayer’s earned income with a maximum credit of US$800 for a married couple filing a joint return and US$400 for other taxpayers; it is phased out for higher income taxpayers, according to the IRS.

Joseph said American Samoa has so far paid out US$4.0 million in the tax credit leaving US$4.6 million available— to make the final payment based on 2009 tax returns filed in 2010.

American Samoa Government paid 65 percent of the credits— which is the advance payment— and the balance will be paid when taxpayers claim their 2009 taxes next year.

Joseph said the Tax Office plans to issue a combined check for the local, Additional Child Tax Credit and the balance of the Making Work Pay credit when the regular tax checks are issued in 2010.

The local plan dealing with the tax credit approved by the feds establishes a procedure for the distribution of advance payments of benefits under the tax, based on information from the 2008 income tax returns that were filed in 2009, as well as the 2009 income tax returns that will be filed in 2010.

The information contained in these returns will be used to determine and make advance payments for 2009 and 2010 taxable years. Additionally, American Samoa will use 2009 income tax returns filed in 2010 and 2010 income tax returns filed in 2011 to determine the actual payments to each eligible individual and adjust any difference to address under or overpayments in advance distribution.

"We are currently working with the U.S. Treasury Department for estimates for the year 2010," Joseph said yesterday. "The advance payment for 2010 will be based on tax filings for those who filed tax returns on or before Apr. 15th and that payment will be made between June 1st and Aug. 31st."

Those who file after Apr. 15 and before Oct. 15, 2010 will get their tax credit in December 2010 and any filing after Oct. 15 will be paid out in the year 2011.

Joseph said the Tax Office will not do "offsets" for the Making Work Credit program; with the exception of child support, which is required by the federal government.

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