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Saturday, February 14, 2009

The package offers more than $200 billion in tax relief for individual taxpayers, including refunds to lower-income families who do not typically owe taxes.

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The biggest chunk of the money will be delivered in the form of the Making Work Pay credit, which will return up to $400 a year to individuals and $800 to families in each of the next two years. The cash will begin flowing immediately into the paychecks of workers who earn less than $95,000 a year and couples who earn less than $190,000.

Though the credit will add less than $20 a week to the typical paycheck, the White House hopes the money will make consumers feel marginally better off and encourage them to start spending.

The package has a tuition tax credit of up to $2,500 for families who make less than $180,000 a year (or $90,000 a year for individuals). And it expands the child tax credit, offering up to $1,000 per child to millions of low-income families who earn at least $3,000 a year.

Families who have not owned a home for at least three years and make less than $170,000 a year (or $95,000 for individuals) also get help: an $8,000 tax credit good for the purchase of a home between now and Dec. 31.

-- Lori Montgomery

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