HELENA The first of 273,000 federal income tax rebates, which total $115 million, will be sent to Montanans next week, with the distribution order depending on the last two digits of their Social Security numbers.
Information from the congressional delegation, Internal Revenue Service and state Revenue Department recaps what will happen. Here are highlights of a summary sheet released by U.S. Rep. Denny Rehberg, R-Mont., on Friday:
Taxpayers will get rebates equal to 5 percent from last years taxable income up to the maximum amount. The maximum amounts are:
$300 for single taxpayers
$500 for heads of households
$600 for married couples filing jointly.
The refund checks wont exceed actual amounts of federal income taxes paid in 2000.
Checks will be distributed based on the last two digits of taxpayers Social Security numbers as follows:
If the last two digits of peoples Social Security numbers are 00-09, taxpayers should get their rebate checks the week of July 23.
Last numbers 10-19, rebates due week of July 30.
Last numbers 20-29, rebates due week of Aug. 6.
Last numbers 30-39, rebates due week of Aug. 13.
Last numbers 40-49, rebates due week of Aug. 20.
Last numbers 50-59, rebates due week of Aug. 27.
Last numbers 60-69, rebates due week of Sept. 3.
Last numbers 70-79, rebates due week of Sept. 10.
Last numbers 80-89, rebates due week of Sept. 17.
Last numbers 90-99, rebates due week of Sept. 24.
Only those people who paid income taxes last year are eligible for rebates.
State Revenue Director Kurt Alme said there has been confusion over the effect of state income taxes on the federal rebate. There will be no tax consequences until next spring.
The 43 percent of Montanans who dont itemize their deductions but declare the standard deduction on their state taxes will see no state income-tax impact on the rebates.
But because of the rebates, the 57 percent of Montanans who itemize their deductions will see a reduction in the deductions they claim on their state income taxes when preparing them by April 15, 2001, Alme said.
The reason, he said, is that people who itemize can deduct their federal taxes from their state income taxes. The fewer federal taxes deducted because of the rebate, the lower the deduction and thus the higher amount of state income subject to income tax.. Montana is one of the few states that allow full state deduction of federal income taxes.
Everyone who gets rebates and itemizes will see some reductions in deductions for federal taxes paid, Alme said.
The reductions in deductions resulting because of the rebates will be up to $66 for married couples filing jointly and up to $33 for single people next spring.
Alme said Gov. Judy Martz wants to see if there are ways to treat the rebates differently so Montanans arent penalized.
Were trying to figure out a way so people dont pay more state income taxes because of this federal rebate, said the governors spokesman, Shane Hedges.
More information is available from the Internal Revenue Service at www.irs.gov or by calling 800-829-1040.