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President Obama's Plan for Recovery 
Don't hold your breath for an economic stimulus check in your mailbox this year. Relief is coming via a more direct route – right in your paycheck. The tax cut is part of the government's $787 billion plan to jumpstart the economy, create jobs and help millions of families get through the toughest of times. The American Recovery and Reinvestment Act of 2009 was signed by President Obama in February. It comes at a time when millions of Americans are laid off from jobs, losing health coverage and facing home foreclosure. The bill addresses the economic crisis on several fronts:
What's in It for You? Workers: The “Making Work Pay” tax credit gives 129 million households a much-needed break. Instead of a stimulus check, federal tax withholdings will be reduced in workers' paychecks (and take-home pay will increase). Individuals get up to $400 and couples up to $800 (the credit is phased out for individuals earning more than $75,000 and couples with incomes over $150,000). Employers were to revise their withholdings by April 1 and continue through the rest of 2009 and 2010. The unemployed: The bill provides help for maintaining health care coverage during difficult times. Under the existing COBRA program (1986 legislation for continuing health coverage), workers who are laid off can buy into their former employer's health insurance plan. This option is unaffordable for many people, because the worker is responsible for 100% of the premium. The new legislation provides a subsidy to help individuals pay for coverage under COBRA. The government will pay 65% of COBRA premiums for up to nine months for eligible workers who were terminated between Sept. 1, 2008, and Dec. 31, 2009. Your former employer is responsible for contacting you and providing an opportunity to enroll in COBRA, even if you initially opted out. First-time homebuyers: First-time homebuyers may be eligible for an $8,000 tax credit for homes purchased between Jan. 1 and Dec. 1, 2009. Unlike the homebuyer tax credit in 2008, this credit does not have to be repaid. Students: Legislation increases the maximum award level of Pell Grants by $500 and provides a new higher education tax cut. A $2,500 tax credit for college tuition and related expenses during 2009 and 2010 helps increase college affordability for eligible individuals and families. Energy savers: The stimulus bill gives dozens of energy initiatives the green light. It extends existing tax credits for energy-efficient upgrades to homes through 2010 and includes a new tax credit of at least $2,500 for purchase of plug-in hybrid vehicles. Tax Dollars at Work Want to get involved and see for yourself where those billions of dollars are going? Check out www.recovery.gov, the official Web site of the American Recovery and Reinvestment Act.* The site is informative, interactive and updated regularly so you can view real-time progress on our nation's road to recovery. *Web site provided for information only; no endorsement is implied. |
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| This publication does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material. Images may be from one or more of these sources: ©Jupiterimages, ©Getty Images, ©iStock, ©SnapVillage. © 2009 Priority Publications, Inc. | |