Last week President Obama signed into law the American Recovery And Reinvestment Bill, otherwise known as the 2009 Economic Stimulus. A big question in the minds of the average American is How can it help me?!?
Here are some ways the American Recovery and Reinvestment Act of 2009 can help you:
- Unemployment – In 2009 you will not have to pay pay taxes on the first $2400 in benefits you receive.
- Social Security – Some social security recipients will receive a $250 refundable tax credit mailed to them within 120 days of the bill’s signing.
- Pell Grant – The maximum benefit for Pell Grants will rise to $5,350 in 2009 and $5,550 in 2010.
- More Liberal 529 Plan – In 2009 and 2010 students can withdraw money or computers and related technology such as educational software or internet service for students living at home.
- Transportation Accounts – Your employers are able to increase transportation spending accounts up to $230 a month. This is money you can have set aside from your paycheck tax free. (Check with your employer to see if they participate and raised their limits.)
- New Car Buyer Tax Deduction – In 2009 you, if you purchase a new car you can deduct the state, local, and excise taxes off of your federal return.
- Higher Tax Credit For Education – A credit of up to $2500 of college tuition and related expenses in 2009 and 2010. You need to spend at least $4000 in the year for the credit and 40% is refundable (which means you can qualify for 40% if you don’t have taxable income).
- First Time Home Buyer Credit – A first-time home buyer credit of 10% of the purchase price of the home up to $8,000 for homes bought in 2009.
- Health Insurance Help for Laid Off Workers – If you were laid off between September 1, 2008 and December 31, 2009 the government will subsidize 65% of your COBRA premiums.
The American Recovery and Reinvestment Act is going to be expensive for the country but at least people get to see some of it.
What do you think? Is it enough for the average person?
Source: NY Times
I thought this was ostensibly a job stimulus bill. Where’s the incentive for employers to hire more employees? Or for entrepreneurs to start their own small business?
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@ Joe – I’d have to look into the rest of the bill for that. The point here was that there was at least a little something here for the average person. I’m looking forward to changing my transportation flexible spending next week to save on taxes!
@ Miranda – I guess they did what they could to get it passed so quick. I think the Cobra help is a nice touch. Most people don’t realize how expensive Cobra really is.
It is nice to see that this bill has some things aimed at helping ordinary folks. It would have been nice, though, if the Dems hadn’t bowed to pressure to remove the funding for half a million more jobs…
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I like the picture with the $2 bills. I picked up one at the bank yesterday!
@ Weakonomist – Those things just keep coming don’t they?
Hm…wish there was more about creating new jobs, though the breaks dealing with unemployment are a welcome thing.
@ Phil – I believe there is a lot regarding job creation but this list is more about how it relates to the average taxpayer.
Well just like everything else in the world, I have mixed feelings about this. I really think the educational benefits will help the nation in general and bring about a better future. I also think the insurance portion will be good but I wish the government would put more into insurance for the poor and middle class. They have continued to raise the threshold to qualify for Medicaid and government health insurance and many people are left in between. These people make just enough to not qualify for medicaid (by even a few dollars, there is no leniency there) but too little to pay for insurance and still put food on the table.
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@ PFF – It’s definitely a tough situation. I’m sure many people fall between the cracks who truly need some help or support. It’s too bad that so many abuse the system too making it harder for those in true need.
Is the business about COBRA a done deal? Around here, they’re screaming that the gummint is going to make employers subsidize that 65%. Is that so? Or is it that the government itself will foot the bill?
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@ Funny About Money – My understanding is the gov’t will subsidize but it could be more of a reimbursement for employers too. Not sure though.