What Benefits Will I See From The Stimulus Bill?
The last week or so I’ve been looking at the 2009 Economic Stimulus bill that was passed, and talking a little more in depth about what some of the benefits are that people can expect to receive. We talked about home buyer tax credits, sales tax credits for new car buyers, and overall stimulus package benefits. Today I thought we could look at some of the direct benefits that people will see in their paychecks, tax returns, or in other ways.
- Making Work Pay Credit: The stimulus bill will give a $400 credit per worker and a $800 credit per working couple. Almost everyone will receive this. The full credit would be paid to people making $75,000 or less ($150,000 per dual-earner couple). A partial credit would be paid to those making above those amounts but no more than $100,000 ($200,000 for couples). The credit 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. For most working individuals, the credit will be paid over time at roughly $15 per period, assuming 26 pay periods in a year. People who are self-employed can adjust their quarterly tax filings to account for the credit.
- One-time payments to those who don’t work: For retirees, disabled individuals and others who don’t work, including Social Security recipients, the bill provides a one-time $250 payment. The money should arrive within 120 days of the bill’s signing. More details here.
- Unemployment : In a normal year you would have to pay federal income taxes on federal unemployment benefits. 2009 will be different. You won’t have to pay taxes on the first $2,400 in benefits you receive. Hopefully you’ll be able to find a new job before long and this won’t be an issue!
- Health Insurance: If you get fired, your company is required, thanks to a law known as Cobra, to allow you to pay to keep your health insurance, generally for up to 18 months. Problem is that it can be quite expensive. If you were forced out of a job between Sept. 1, 2008, and Dec. 31, 2009 the federal government will now subsidize 65 percent of your health insurance premium for up to nine months. The caveat is that your income in the year you receive the subsidy cannot be more than $125,000 for individuals or $250,000 for married couples filing their taxes jointly.
So those are a few of the direct benefits individuals will see as a result of the American Recovery and Reinvestment Act.
How Will We Pay For The Stimulus?
Personally these things sound good on the face, but when you start adding all the dollar figures up, it’s hard to figure out where the money to pay for all of these things is going to come from. Our grandchildren’s children are probably still going to be paying for all this! What do you think about these benefits that we’ll be seeing from this stimulus bill? Are the costs worth it? Check out this post for more details on how individuals will be affected by the stimulus package.