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.
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