Rebate check is in the mail for some taxpayers

WASHINGTON (CNN) -- Taxpayers with the right Social Security numbers will be checking their mailboxes Saturday to see if they are a few hundred dollars richer.

The federal government mailed 8 million rebate checks Friday to those with Social Security numbers ending in 00-09.

A total of 92 million checks -- which range from a maximum amount of $300 for single filers to $600 for married taxpayers who filed jointly -- will be mailed out by the end of September. Single parents will get about $500.

In order to get the full amount, a single taxpayer must have had at least $6,000 in taxable income for 2000, or $12,000 for a married couple filing jointly.

VIDEO While many Americans will get a check from Uncle Sam, others will find the mailbox empty. CNN's Jonathan Karl reports (July 21) Play video (QuickTime, Real or Windows Media)

President George W. Bush hopes taxpayers will spend their refunds to give a swift kick to the sluggish economy. But a CNN/USA Today/Gallup poll indicates that less than 20 percent of people will actually spend their money on material goods.

The poll indicated that about 47 percent of those questioned said they would pay bills with the rebate money, 32 percent will save it, 17 percent will spend it and 2 percent will donate their check to charity.

Cash it here, spend it here

Several businesses are trying to encourage those with rebate checks to spend their money while in their stores.

People can cash their checks at Wal-Mart stores across the country or spend the amount in the store against the value of the check. Home Depot stores are offering customers credit based on the expected amounts of their rebates until their checks come in.

The rebates -- $38 billion worth -- are the product of Bush's tax legislation, which reduced the base income tax from 15 percent to 10 percent. That reduction is retroactive to January 2001, so what taxpayers will get is a refund of taxes they have already overpaid this year through federal withholding from their paychecks.

Not everyone will get a rebate check. Those who did not file a return last year, those who had no taxable income and those who can be claimed as dependents on someone else's tax return will not qualify. The rebate only goes to those Americans who paid federal income tax.

The amount of some taxpayers' checks may be smaller, too, if they owe any back taxes, child support payments or federal loan payments. The government will deduct those debts from rebate checks before sending them.

May boost state taxes for some

To celebrate the mailing of the first checks, Vice President Dick Cheney and Treasury Secretary Paul O'Neill went to a government check-writing facility in Kansas City, Missouri, on Friday. Bush joined them via satellite from Genoa, Italy, where he is participating in the G8 Summit.

Bush said the tax rebates will give families a break and should also stimulate the economy.

"Beginning late last summer and early fall, our economy, especially the manufacturing sector, began slowing," he said. "The combination of this tax relief and lower interest rates should help get it moving again."

The Internal Revenue Service sent letters to those who would receive rebates earlier this month. The letter explains that the checks are being sent out based on the last two digits of the taxpayer's Social Security number, in ascending order starting with 00-09. The checks will be mailed out every Friday through September 24.

If a taxpayer filed his or her 2000 income tax return late, the rebate check will come after the end of September.

The government says the checks will not be counted as taxable income for the 2001 federal tax returns, but residents of some states may have to pay slightly higher state taxes because of the rebates.