The Economic Stimulus Bill

The American Recovery and Reinvestment Act of 2009, commonly known as the Economic Stimulus Bill, was passed into law on February 19, 2009. This bill is a combination of additional Federal government spending and tax benefits.

So, “What’s in it for me?”

One provision of the bill, called the “Making Work Pay” provision, creates a tax credit for workers of approximately $400. While previous efforts last year put lump sums directly in consumers’ hands, this provision will be enacted by adjusting the paychecks of eligible individuals through lower Federal income tax withholdings, to the tune of about $10 per week.

There is also a first-time homebuyer credit, which is an $8,000 tax credit if you buy a principal residence by December 1. The credit is available to home buyers who haven’t owned their primary residence for the past three years. The income limitations for this credit are $75,000 for individuals and $150,000 for married couples.

Another credit to help stimulate the economy – an auto sales tax credit, where you can deduct the portion of state and local sales and excise taxes on the first $49,500 of a new car or light truck’s purchase price.

There are also other provisions dealing with college costs, the Earned Income Tax Credit, unemployment benefits, using public transportation, the alternative minimum tax, and energy incentives.

For a summary, which provides an overview as well as summaries for both individuals and businesses, click here.