IRS to start sending tax checks July 23

By Mike Gordon
Advertiser Staff Writer

In just a few weeks, your tax-relief check will be in the mail. That's a government promise.

Hawai'i taxpayers will start receiving checks of up to $600 beginning the week of July 23, said Internal Revenue Service spokeswoman Shawn George. The money, which will total $172 million for the state, is part of the federal Economic Growth and Tax Relief Reconciliation Act, which directs the U.S. Treasury to make advance payments of the 2001 tax credit.

The Internal Revenue Service will let taxpayers know by mid-July the amount they will receive. Taxpayers will receive a letter telling them the amount and the approximate date the money will arrive by mail (see chart). They are advised to keep the letter, George said.

Single taxpayers who paid federal income taxes in 2000 could receive up to $300, household heads as much as $500 and married couples with a joint return up to $600, George said.

The tax refunds mean a small boost in spendable income this year for many residents and a noteworthy inflow for businesses. If recipients spend half of the refund money locally, they'll pump $86 million into the state economy, said Gregg Furuya, managing tax partner for the Honolulu office of Deloitte & Touche LLP.

"It's going to have an immediate impact," he said.

This year's refunds are just one part of a tax-cutting package that calls for incremental income-tax reductions through 2006 and other incentives through the end of the decade. Of note in Hawai'i, Furuya said, are increases in the amounts people could donate tax-free toward college savings plans.

"For people in Hawai'i who place such value on higher education," he said, "it's really going to have a targeted benefit."

As for this year's refunds, the last two digits of your Social Security number determines when your advance payment will be mailed. For example, if your last two digits are 00-09, your check will be mailed the week of July 23, the first week checks will go out.

Other than having filed a 2000 tax return, taxpayers do not need to do anything to receive the check. The IRS wants to make the process as simple as possible. If you have moved, you need to file a change of address form with the U.S. Postal Service.

"All you need to do is open your mailbox. We'll take care of everything else," said IRS Commissioner Charles O. Rossotti.