The 2008 Stimulus Bill Has Passed
If you’re looking for details about the 2020 coronavirus stimulus package, please had on over to this other post about 2020 stimulus checks.
Now that the $787 billion stimulus package has passed and been signed into law by President Obama, everyone is scrambling trying to figure out what they’ll get out of the deal.
CNN put out a post a couple of days ago detailing how the stimulus package would affect individual taxpayers. Here’s a summary of things included in the plan that may affect you.
Stimulus Package Benefits For Individual Taxpayers
Making Work Pay Credit: The bill provides a $400 credit per worker and a $800 credit per dual-earner couple. 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. Estimated cost: $116 billion.
One-time payments to those who don’t work: For retirees, disabled individuals and others who don’t work, the bill provides a one-time $250 payment. Estimated cost: $14.2 billion.
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. Estimated cost: $470 billion.
Temporary deduction for car buyers: The bill would let those who buy a new car, light vehicle, recreational vehicle or motorcycle in 2009 deduct state and local sales taxes as well as any excise tax charged in the purchase. The deduction would be available to those earning less than $125,000 ($250,000 for joint filers). Estimated cost: $1.7 billion.
Temporary credit for home buyers: The bill increases the size of an existing temporary and refundable first-time home buyer credit to $8,000, up from $7,500. It also removes the requirement under current law that the credit be paid back if the buyer stays in the home for at least three years. And it would extend the credit’s expiration date to Dec. 1, 2009, from July 1. Those eligible for this credit must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009. The full credit is available to those making $75,000 or less ($150,000 for joint filers). Estimated cost: $6.6 billion.
New temporary college credit: The bill introduces the American Opportunity Tax Credit, which would be in effect for 2009 and 2010. It expands the existing Hope Scholarship tax credit and would be worth as much as $2,500 for higher education expenses, up from $1,800 currently. The full credit would be available to those making less than $80,000 ($160,000 for joint filers). Those making between those amounts and $90,000 ($180,000 for joint filers) would get a partial credit. And the break would also be partially refundable, meaning lower income families with little or no tax liability could now claim some of the credit. Estimated cost: $13.9 billion.
Temporary Pell Grant increase: The bill increases the maximum Pell Grant by $500 to $5,350 in 2009 and $5,550 in 2010. Estimated cost: $15.6 billion.
Temporary expansion of child tax credit: The bill increases eligibility for the child tax credit by lowering the income threshold that must be met for the credit to be refundable. The threshold would be lowered to $3,000 for this year and next. That will allow lower income families to claim more of the credit than under current law. Estimated cost: $14.8 billion.
Temporary increase in earned income tax credit: The credit will be temporarily increased to 45% from 40% 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. Estimated cost: $4.6 billion.
Direct lifeline benefitsHealth insurance help for the jobless: The bill includes provisions to help eligible jobless workers pay for health insurance under Cobra. Cobra coverage allows newly unemployed workers to keep health insurance provided by their former employers for a period of time.
For workers who have been laid off between Sept. 1, 2008, and Dec. 31, 2009, the government will subsidize 65% of their premiums under Cobra for up to 9 months.
Those people laid off between Sept. 1, 2008, and the day the stimulus law goes into effect, and who did not sign up for Cobra, will get an additional 60 days to do so and receive the subsidy.
The subsidy will be limited to those whose income for the year is $125,000 or less ($250,000 for couples filing jointly). Estimated cost: $24.7 billion.
Another provision provides states funding to help pay for expanded Medicaid rolls for workers who’ve lost their jobs and can’t afford health care on their own or can’t get Cobra coverage because their former employer doesn’t offer a health care plan. Estimated cost: $87 billion.
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 now about 30. Estimated cost: $27 billion.
In addition, the weekly unemployment benefit will temporarily increase by $25 on top of the roughly $300 jobless workers currently receive. Estimated cost: $8.8 billion.
Plus, the first $2,400 of benefits in 2009 would be exempt from federal income taxes. Estimated cost: $4.7 billion.
Food stamp payments: The bill includes a provision would increase food stamp payments by 13.6%, so a family of four would see an additional $80 on top of the $588 per month they receive currently. Estimated cost: $19.9 billion.
The bill also provides assistance to help local groups providing food and shelter, elderly nutrition services such as Meals on Wheels, and a program to help food banks re-stock their shelves. Estimated cost: $350 million.
Other help for needy families: The bill provides funding 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. Estimated cost: $2.4 billion.
What Do You Think?
So those are some of the main provisions affecting individual taxpayers in the “stimulus” bill.
Which points will you qualify for, and how much will you be getting from the stimulus? Tell us your thoughts in the comments!
I think we’ll just get the first tax credit, but I’m not sure how it will come as we are both self-employed at the moment.
Maria @ Residual Income Webs last blog post..Why Blog Earnings are not Passive Income (But I’m Still Blogging)
I’m thinking about opening a savings account and putting my $13 a week in there as seed money for a business. Wouldn’t it be something to bootstrap a business just using the stimulus money?
M_Webers last blog post..m_weber: Michael Jordan just turned 46. Does that make you feel old?
I, too, have questions about how I’ll get the tax credit as a self-employed person. Guess I’ll ask the accountant next week. Anyway, I think some of the measures will be helpful, but for the most part many of those aimed at the people are really head-pats to keep us happy. As I’ve said before, it’s not a couple of large economic stimulus bills that get me — it’s all the other measures they put into play, from Geithner’s $1.5 – $2 trillion bank rescue to the billions for car companies and emergency “loans” for banks to the $75 billion foreclosure prevention plan. Honestly, most of the economic stimulus money hasn’t been really publicized, and it hasn’t been legislated.
Mirandas last blog post..Economic Stimulus Plan: How Will It Help Your Personal Finances?
There was a short period in my life when I had to go on food stamps. At the time I was as single mom to 2 little children. When I was married I budgeted about 200 a month on food for my husband, myself and our 2 kids (this was nearly 10 years ago) but when I went to food stamps they gave me nearly 425 a month (for me and 2 little kids)! For me this was just a lot! I could not eat it all. I remarried about 2 years later–right before we got married I had about $1000 in food stamps I had not used. I really felt they overpaid people on those things…So it sickens me to see that food stamps is going to increase–a famly of 4 gets over 600! Heck we are a family of 6 and my budget is 600–and I now have 2 teen boys plus two little ones I feed on that!
The 15 dollars is a joke–I will now do everything in my power to put 15 a paycheck into savings—just as spite! Last year when they gave me a the lump sum we actually used it for a vacation. So yeah, some may have socked it a way but I bet more spent it.
What about stay-at-home moms not earning anything outside the home??? Do we qualify for the one-time payment?
I’m very seriously guessing we stay at home mom’s don’t count as “working” which stinks.
Honestly the whole thing seems like a dumb idea to me. We as a country are already digging ourselves a shallow grave as is, and have been for quite some time. None of the above mentioned really seems to me like something that would stimulate the economy, EXCEPT maybe the car and house buying ones… how on earth increasing welfare will stimulate the economy eludes me.
Rebeccas last blog post..Affairs
So stay-at-home moms don’t get a check?
This post is about the last stimulus in 2008. To see updated details about the 2020 stimulus check see this post:
2020 Stimulus Check
My wife and I will be closing on our new home in 2 months. We will get the $8000 credit. Hooray!
We plan to put some pay down debt with most of it.
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I, too, was wondering about self-employed people…How will they get “the credit”? I have a typical payroll job but my husband is self-employed. It would be really nice if it was set up somehow similar to the Earned Income Credit so you can designate on a form that I am “collecting” the credit for both me and my husband and have it all on my paycheck.
In one aspect it does seem like a trivial amount of money, but then again, I know how far I can streatch $60 so it will help. I will probably use it to pay off my car faster. I can’t wait to get out from under that loan! I will never buy a NEW vehicle again! :(
Why not just have people claim bankruptcy, the nation falls for quite a while, and then things start back debt-free after about 10 years so that the nation learns.
My husband and I bought our first home on December 30, 2008. Two days too early to qualify for the higher tax credit and avoid being forced to repay the tax credit. The good news is we have paid the entire credit toward our home loan, which will save us almost $25,000.00 on our home loan and lead to us pay the home off almost 10 years sooner. So, that $500 a year tacked on to our taxes for repayment- so worth it!
i’m not to happy about leaving all this debt for my children and their childrens children, however, i do think its about time that we invest in our country and do something to help the people in this country, im tired of footing the bill for foreign countries and their problems while we struggle everyday to get by. whats wrong with investing in our country? as long as the money actually gets to the people in need i think its a good plan…however, most of the time the money goes to money…and the people in need never get help…i think that the people in the banking industry who took taxpayers money and spent it on elaborate bonus’ should go to jail..have they no conscience…
pat in nj
15.00 dollars what a joke …
Thanks for the two gallons of gas
Since some of you are saying $15.00 is not much and some said it is a joke…maybe we should all write a check BACK to the government weekly and pay off our debt :)
Our Debt? Created by our wonderful government not by your average american. Someone up there is spending money where it shouldn’t be,and leaving the middle class american to pay for it. Get a grip!!!
I’m sorry isn’t it the nation’s debt? Are we not part of the nation? Even you stated the middle class AMERICANs are paying for it.
So yes….it is our debt. Whether we created it or not….and I guess you can say we did create the debt in a way……aren’t we the ones who voted the government officials in?
I think this years “tax rebate” sucks, 15-20$ per week, BFD, do they really think this will fix the mess our country is in??? They need to think long and hard about that!!!
I am currently enrolled under the Title 5 program through the Senior Employment Center ( Mature Services) in Trumbull County and was wondering if I would be getting any of the monies from the stimulus plan put in placed and approved. I have not received anything in the mail as others have in my area. Please let me know.
Thank You, Judy
I am in a situation that I could make over the 125k so I would not be able to get the new car tax credit. My girlfiriend lives with me we don’t file joint and she makes less the 125K and we bought two new cars this year. Both cars will be titles in both or are names can she claim more then one car for the tax credit. Thanks Ron
Where do i go to get forms for the 2015 renters stimulus package