Tarpley & Underwood
Financial Advisors, LLC
Obama's Stimulus Plan
A look at where the money goes.
President Obama signs The Recovery & Reinvestment Act on February 17, 2009
On February 17, 2009, President Obama signed the 1,071-page American Recovery and Reinvestment Act (H.R. 1) into law. Here are some of the routes the money will take.
I. $287 billion in tax breaks include…
$116 billion in refundable tax credits for individuals & families.
Is your adjusted gross income (AGI) $75,000 or less? You will get a refundable tax credit of up to $400. Families who earn less than $150,000 in AGI can get a refundable tax credit of up to $800. You won’t get a check in the mail. Instead, withholding tax on your paycheck will be lessened by about $8 per week across the remainder of 2009 and also in 2010.1
$70 billion to patch the Alternative Minimum Tax.
The AMT exemption has been raised to $46,700 for individuals and $70,950 for couples.1
$14 billion to expand the child tax credit.
This will help low-income families.2
$13.9 billion toward Pell Grants & education tax credits.
Pell grants will increase to $5,350 per student for the 2009-2010 year. Also, if you earn less than $80,000, or if your family earns less than $160,000, tax credits of up to $2,500 will be available for college tuition. Up to 40% of that credit is refundable (as much as $1,000).3
$6.63 billion to aid homebuyers.
Specifically, “first-time” homebuyers. The bill defines a “first-time” homebuyer as someone who hasn’t owned a home for the past three years. If you fall into that category and you buy a home in 2009, you are eligible for an $8,000 tax credit – and you don’t have to pay it back. Some “first-time” buyers will not be eligible – the credit phases out at $75,000 AGI (individual taxpayers) and $150,000 AGI (joint filers).3
$1.7 billion to help new car buyers.
If you buy a new car in 2009, you can deduct the sales tax on it if your AGI is below $125,000 (individuals) or $250,000 (joint filers). No Bentleys: the car can’t cost more than $49,500.1&3
$23 billion to States.
$18 billion of it goes to financing for public schools, and for investments in economically downtrodden neighborhoods.2
$21 billion for energy projects.
$4 billion of that goes to incentives to encourage more energy-efficient homes and more hybrid car purchases.2
$10 billion in business tax breaks.
That includes $5 billion via accelerating depreciation of certain capital assets by 50%, and $3 billion for General Motors.1&2
Source: The American Recovery & Reinvestment Act www.recovery.gov
