NY State Governor Eliot Spitzer today announced that rebate payments from the upcoming federal economic stimulus package will not be subject to New York State income tax.

For taxpayers who qualify, the IRS will begin sending taxpayers their rebate payments in early May after the current tax season concludes. In most cases, the payment will equal the amount of tax liability on the tax return, with a maximum amount of $600 for individuals ($1,200 for married couples who file a joint return). Payments to more than 130 million households nationally will continue over several weeks during the spring and summer.

“During these challenging fiscal times, it is particularly important for all New Yorkers to know that they will retain the full amount of this rebate, and will not be taxed on these amounts next year,” said Governor Spitzer.

In order to get the rebate payment in 2008, taxpayers must file a 2007 federal tax return regardless of whether they owe federal income taxes. No other action, extra form or call is necessary. New Yorkers will not be required to file a 2007 New York tax return if they filed a federal tax return solely to get the rebate.

However, New Yorkers should review the tax return instructions to see if there is another reason why they should file a New York return – for example, you must file a New York return if your federal adjusted gross income plus New York additions exceeds $4,000.