Ro Troia

How Will The Stimulus Package Affect Us

Today, rates are below 5% again! 

Go buy a bigger wallet because  Congress appears to be close to putting the final touches on the economic recovery plan.  Some of the likely provisions are:

1. Make Work Pay Credit: The bill provides a $500 credit per worker and a $1,000 credit per dual-earner couple. The full credit would be paid to people making $70,000 or less ($140,000 per dual-earner couple). It would also be refundable, which means that even very low-income families who don’t make enough to owe income tax would be able to claim it.
2. One-time payments to those who don’t work: For seniors who don’t work, as well as disabled veterans and retired railroad workers, the bill provides a one-time $300 payment.
3. Break for higher income families: The bill includes a one-year provision to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax. The AMT was intended primarily for high-income taxpayers but has in recent years threatened to engulf those lower down the income scale.
4. Temporary credit for car buyers: The bill would let those who buy a car in 2009 deduct the interest they pay on their car loan as well as the sales tax charged in the purchase. The full deduction would be available to those earning less than $125,000 ($250,000 for joint filers).
5. Temporary credit for home buyers: The bill doubles the size of an existing temporary home buyer credit to $15,000. It also would allow all home buyers to claim it. And it removes the requirement under current law that the credit be paid back.
6. New college credit: The bill introduces the American Opportunity Tax Credit, a $2,500 credit for higher education expenses. The full credit would be available to those making less than $80,000 ($160,000 for joint filers).
7. Pell Grants: The bill increases the maximum Pell Grant by $281 in the 2009-10 academic year and by $400 in the 2010-11 academic year
8. Child care credit: The bill increases eligibility for the child care tax credit by lowering the income threshold that must be met to $8,100. That will allow lower income families to claim more of the credit.
9. Earned income tax credit: The credit will be temporarily increased from 40% to 45% of qualifying earnings for low-income families with three or more children. It also includes a marriage penalty relief provision for couples who qualify for at least a portion of the credit.

Health Benefits include:  Health insurance help for the jobless. The bill includes provisions to help eligible jobless workers pay for health insurance under Cobra. Cobra coverage allows newly laid off workers to keep health insurance provided by their former employers for a period of time.  One of the provisions offers a government subsidy, 50% of premiums for 12 months. 

Unemployment Benefits:   

The bill provides jobless workers with an additional 20 weeks in unemployment benefits, and 13 weeks on top of that if they live in what’s deemed a high unemployment state, of which there are about 30 currently.

In addition, the weekly unemployment benefit will temporarily increase by $25 on top of the roughly $300 jobless workers currently receive. Also included in the bill is an incentive for states to provide unemployment insurance coverage for part-time workers and for workers who quit their jobs for compelling family reasons.

Plus, the first $2,400 of benefits in 2009 would be exempt from federal income taxes. 

Food stamp payments: The bill includes a provision would increase food stamp payments by 12%, so a family of four would see an additional $71 on top of the $588 per month they receive currently. 

Help for needy families: The bill provides $2.3 billion to states to create a contingency fund through 2010 for the welfare program called Temporary Assistance for Needy Families, which provides cash assistance to the needy. 

The source for this information comes from Coldwell Banker Mortgage and CNN. 

 

Tags: Tags: economic recovery, home buying, recovery plan, stimulus package, tax credits

This entry was posted on Wednesday, February 11th, 2009 at 11:46 am and is filed under Buyer's Corner, First Time Buyers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. AAnna said at February 12th, 2009 at 1:45 pm

   i have a question regarding Make Work Pay Credit.
   I have prepared my taxes but not filed it yet. So if the stimulus package is passed, do I have to download updates to my software (TaxCut) to see if I can $1000.00 credit and will that in turn increase my refund?
   thanks

2. Ro Troia said at February 12th, 2009 at 3:07 pm

   In response to your question, first of all we all must wait until this bill is signed by the President which should happen tomorrow and second to see exactly what does get approved. I strongly recommend that you talk to your tax advisor regarding the tax cut and if it’s applicable to 2008 taxes. You might also contact the software provider for your tax program to see if they have any updates that you need to install.

3. Dagan said at March 11th, 2009 at 2:22 am

   Commenting usually isnt my thing, but ive spent an hour on the site, so thanks for the info

4. Colorado Medical Health Insurance said at June 19th, 2010 at 8:57 pm

   Glad I found this site – I have to agree this site is providing a great resource. Keep it up. Joanne Wilson

5. Big Lebowski said at October 22nd, 2010 at 1:27 am

   And what about the new Obamacare? Anyone has any thoughts about it?

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