Stimulus package Money to the people
February 26, 2009 - The Fayetteville Observer
Gregory Phillips
Feb. 26, 2009 (McClatchy-Tribune Regional News delivered by Newstex) --
Where you can find your stimulus bucks
Banks, automakers and states aren't the only ones who get a piece of the
$787 billion federal stimulus package.
There's a good chance your family qualifies for tax credits, grants and
other help, especially if you're struggling financially. But don't expect
all the benefits to fall into your lap.
You'll need to understand what's available to you, and how to qualify. That
means keeping receipts and paperwork if you buy a new car, for instance. If
you typically fill out the simple tax form, you may want to pay close
attention to deductions next year. And if you've lost your job or get laid
off this year, there are programs that can help you get back on track.
Where's my check?
Don't expect a rebate check in the mail. This package mostly involves the
government taking less money from you, rather than giving you more. But
retirees, veterans on disability and pensions, Social Security recipients
and railroad retirement beneficiaries will get a one-time payment of $250.
The Social Security Administration hasn't decided how the payments will be
distributed, but expect by late May to see the money automatically -- no
action required on your part.
Got a job? Workers will get $400 per person, or $800 per couple, in the form
of a tax credit in 2009 and 2010. Your employer will give you the options of
pocketing a little more in each paycheck beginning July 1 or claiming the
credit on your tax return next year to get a lump sum. Workers who make more
than $95,000 (or $180,000 for couples) will get less.
Got kids?
A $1,000 child tax credit for each qualifying child under 17 will be
extended to more families who don't earn enough to pay income taxes. That
means if you qualify but don't owe taxes, you get the credit in a tax refund
check. The Earned Income Tax Credit will expand similarly for low-income
families with three or more children. In both cases, you should file tax
returns in early 2010.
An expanded college tuition tax credit of $2,500 takes effect for 2009 and
2010. The maximum Pell grant for undergraduates, based on need, increases
from $4,731 to $5,350 starting July 1. To learn more, go to www.ed.gov/programs/fpg.
Ready to buy a home?
If you've never owned a home (or haven't in at least three years), now might
be the time to buy. You'd be eligible for a tax credit equal to 10 percent
of the purchase price, up to $8,000, if you buy by Dec. 1. You don't have to
pay it back if you stay in the home at least three years. Last year's
stimulus package provided a smaller credit and required repayment over 15
years. If you already bought a home this year and filed taxes under the old
credit, you can file an amendment for the additional amount.
Buying a vehicle?
Buyers of new cars, light trucks, motor homes and motorcycles can deduct
state and local sales taxes on the first $49,500 spent. You have to buy this
year and earn less than $150,000 ($250,000 if filing jointly). There's a tax
credit of up to $7,500 for buying a plug-in hybrid vehicle or plug-in
conversion by 2012.
Still confused?
If you don't mind paying an accountant, it may be smart to get some
professional help with all these credits and deductions next year. But an
IRS spokesman said these changes don't mean you have to, even when it comes
to the Alternative Minimum Tax, which is amended to save about 24 million
people from paying it. About 70 percent of taxpayers making $56,000 a year
or less qualify for free online filing at www.irs.gov. The site will be
updated with the new tax code by January. So will most commercially
available computer software packages for filing taxes.
On the Web
The federal government has set up the Web site www.recovery.gov to show
where the stimulus money is going once it starts flowing. Visit www.irs.gov
for updated tax information.
Lost your job?
The law includes $46 billion for North Carolina to create or protect 105,000
jobs. But if you've lost yours already, you'll see your unemployment
benefits go up $25 more per week in the next few weeks. Benefits are
extended through the end of the year for those eligible. And the first
$2,400 in benefits will be exempt from your income tax.
If you lost a job after Sept. 1, 2008, or get laid off this year, the
government will pay 65 percent of your health insurance premiums through the
federal COBRA program. That's if you had insurance at your old job and you
choose to retain coverage with COBRA. If you already opted to not take
COBRA, you have about 60 days to sign up and get the subsidy. According to
eHealthInsurance, it's not clear how the subsidy will be handled. Keep in
touch with your former employer for details. If COBRA fees are too high even
with the subsidy, go to www.coverageforall.org to review your options.
Money for job training is expanded under the Trade Adjustment Act for
workers laid off by companies that move overseas. The new plan provides
training for workers who lose jobs with service companies affected by
industry moving abroad. This could make farmers or even whole communities
eligible for aid if they show a direct impact. Funding for training in North
Carolina could more than double to as much as $40 million. The Employment
Security Commission oversees the training money. Call your local ESC office
to learn more.
Help us to better serve you by answering this quick survey!
Newstex ID: KRTB-0072-32297015
|