People have pretty strange ideas about taxes and the government. The weird one that is making the rounds is that the economic stimulus rebate checks are actually loans. That they’ll have to be paid back. That you shouldn’t cash the check or even file for it because it’s just money you’ll owe.

It isn’t.

It is actually a credit that Congress has given you against 2008 taxes, the ones you owe this year. To stimulate the economy, Congress passed a law directing the Treasury to send taxpayers (and even non-taxpayers) a check equal to the credit they would have gotten on this year’s taxes. The check was simply to speed things up.

You don’t have to pay it back.

To quote from Congress’ Joint Committee on Taxation’s report on the economic stimulus bill: “The checks have no effect on tax returns filed for 2008.”

The report says the rebate is not taxable income to you. If the IRS calculates incorrectly and pays you too much, “the taxpayer is not required to repay that amount to the Treasury.” If the IRS pays you too little, you might claim that amount as a credit against taxes you owe in 2008. It is a refundable credit, so you might get a check next year, too.

You don’t have to pay it back.