Nobody needs to tell you that the economy is in a very bad place. We're all wondering when it will get better. We've heard about the "Economic Stimulus Package" and want to know what it will do for us as individuals.
The formal name for the legislation that's supposed to help revitalize our economy is "The American Recovery and Reinvestment Act of 2009." The legislation was signed into law by President Obama on Tuesday, February 17, 2009.
There is still some uncertainty about exactly how the various government agencies will spend the money allotted to them, but below are a few things that The American Recovery and Reinvestment Act is providing for now.
- The "Making Work Pay" tax credit provides about 95% of working families with a tax cut. Individuals earning up to $75,000 and married couples filing jointly and earning up to $150,000 will receive tax credits up to $400 (for individual filers) or $800 (for joint filers) tax credit in 2009 and 2010.
- If you are receiving unemployment, beginning the week of March 25, 2009, an extra $25 was added to your weekly unemployment benefit. The first $2,400 of unemployment benefits will be excluded from federal income tax. Depending on your state, there may be additional weeks of unemployment benefits provided too.
- Some people who are eligible for continued health insurance coverage under the federal COBRA law may receive a subsidy for 65% of the costs of their health care premiums.
- Small businesses can receive help with loans, tax incentives, and more through the Small Business Administration. In addition to making more funds available for small business loans, the act also eliminates fees on SBA-backed loans for the remainder of 2009 or until the $375 million in funding runs out.
- Taxpayers who buy a new passenger vehicle may be able to deduct the sales and excise taxes on their 2009 tax returns.
- Qualifying taxpayers purchasing a home before Dec. 1, 2009, may be eligible for up to $8,000 for a first-time homebuyer credit. The credit can be claimed on 2008 or 2009 tax returns.
- The US Department of Agriculture has started the disbursement of $10 billion in guaranteed housing loans to help "spur economic and home ownership opportunities in rural America."
- A one-time payment of $250 will be given to individuals who get Supplemental Security Income (SSI) or Social Security benefits. Everyone who is entitled to this payment should receive it by late May 2009.
- As of March 2009, there are no plans for stimulus checks similar to those distributed in 2008.
The American Recovery and Reinvestment Act provides for distribution of $787 billion to various programs and agencies. Many of those agencies are still deciding how to use the money. You can see distribution estimates and keep track of where the money is going at www.recovery.gov.
Much of the federal money is also funneled down to the states, so check your state government's website for state-specific information. In addition, the Internal Revenue Service provides some valuable information regarding recent tax updates.