The 2009 economic stimulus was passed last month, and it looks like you will be seeing more money in your paycheck soon. Starting April 1, 2009, you should start receiving the Making Work Pay tax credit, which gives eligible tax payers an additional $400 – $800 per year. Single tax filers will receive $400, and married filing jointly will receive $800.
Here are some more benefits in the 2009 economic stimulus package:
Personal Tax Breaks in the 2009 Economic Stimulus Package
There are numerous personal tax breaks in the economic stimulus package, including the Making Work Pay tax credit mentioned above. It’s important to note that there will not be another stimulus check this year. The Making Work Pay tax credit takes fewer taxes out of workers pay checks from April 1, through the end of the year.
One-time $250 payment to people who don’t work. This $250 one-time payment will be sent out to retirees, people on disability and others who don’t work.
Alternative Minimum Tax (AMT) relief. The economic recovery bill calls for a higher exemption limit on the AMT. This should equate to an average tax savings of $503 on taxable income levels between $66,354 and $111,645.
$8000 first time home buyer’s tax credit
Last year there was a $7,500 first time home buyer’s tax credit which was essentially a loan because it had to be repaid. This portion of the tax code was set to expire in July of 2009, but the new stimulus plan brought the tax credit back in the form of an $8,000 tax credit for first time home buyers that is not required to be repaid.
In order to qualify for the $8,000 first time home buyer’s credit, you will need to purchase your first home between January 1, 2009, and December 1, 2009.
New car buyer’s tax credit
The US auto industry is a major component of our economy and the US government wants to keep it alive. That’s good news if you are looking for a new car. New car buyers who earn less than $125,000 (single filers) or $250,000 (joint filers) are eligible to write off state and local sales taxes and excise taxes from new car purchases made in 2009. This is an above the line tax deduction which means you don’t even need to itemize your taxes to take advantage of this tax deduction.
Unemployment and COBRA Benefits
The stimulus plan also offers help to those who have recently become unemployed due to the poor economy. Unemployment benefits and COBRA insurance benefits are available to many people when they become unemployed, and the US government just extended those benefits in terms or duration and monetary compensation.
Unemployment benefit increases. Unemployment benefit payments were increased an average of $25 per week, and there are extensions to how long one may claim unemployment benefits. For more information please see this article: 2009 economic stimulus plan unemployment benefits.
COBRA benefits. COBRA insurance benefits also saw an improvement in the 2009 economic stimulus plan. Benefits may include subsidies or increased duration for being eligible for COBRA. For more information please see this article: 2009 economic stimulus plan COBRA benefits.
Education benefits in the 2009 stimulus plan
The 2009 economic stimulus plan brought increased educational tax credits and Pell Grants. These increase will put more money into the hands of students, and ease their burden of going to school and trying to make ends meet.
Social benefits in the 2009 economic stimulus plan
Finally, there were numerous social benefits added to the 2009 economic stimulus plan, including an increase in food stamp benefits and welfare. These benefits will help thousands of people put more food on the table each week.
Will the 2009 economic stimulus plan work?
It’s no secret our economy is hurting. I think the stimulus has a chance to help a lot of people – particularly those who are unemployed and receiving COBRA benefits, and those who are receiving social aid such as food stamps or welfare. This plan also differs from the first economic stimulus plan which only sent out checks. This plan calls for job creation and increased social benefits for those who truly need it.