Benefit from the Recovery and Reinvestment Act

In an effort to revive the American dwindling economy, many bills has been introduced to the Congress. The most expensive bill, so far, is The American Recovery and Reinvestment Act of 2009. Now that the bill has been passed in both the House and Senate. Obama has signed the bill to become a law. Obama is a typical Democrat and a demandsider. This law mainly benefit the consumers and the general public, especially the low-income and middle-income people. Now let us take a look at what the consumers and the general public can benefit from this program.

The law provides a tax-rebate of $400 for each individual who has a yearly income of $75,000 or less, $800 per dual-earner couple making $150,000 yearly or less. A partial amount of $800 would be paid to those making more than $150,000 but less than $200,000. ($100,000 for those who file separate tax return) The rebate will be paid overtime at roughly $15 per period of about 26 pay period in a year through reduction of withholding tax. But the retiree, disabled and the unemployed individual can get a check in a lump sum of $250. This credit will be refundable. That means those who do not make enough to owe any income tax can also claim the rebate.

Couple who make more than $200,000 ($100,000 for individual) will not be qualified for this tax rebate. But an one-year provision of exempting from paying alternative minimum tax of $46,700 for an individual and $70,950 for a married couple is provided.

Now the price of properties has dropped tremendously. Maybe you are thinking about buying a home. This law provides incentive to individual who make $75,000 or less a year ($150,000 for a couple). It increases for the first-time homebuyer the tax credit by the amount of 10% of the purchase price or $8,000 whichever the less, up from $7,500 provided in the Housing and Economic Recovery Act of 2008. Unlike the Housing and Economic Recovery Act of 2008, this tax credit amount need not to be paid back. But the credit amount must be paid back if the buyer stay in the new home for less than three years. First-time homebuyers are those who do not own a house in the last three years. The new home could be a house, townhouse, condominium, mobile home or houseboat. Those who are eligible for this credit must buy a home before December 1,2009 in order to claim for this credit.

If you’ve been thinking of adding new windows, an outer door, insulation, or other energy-efficient improvements around your house, this might be a smart year to do so. Additional purchases include energy efficient appliances such as air conditioners and water heaters. The law will pay home weatherization grant to low and middle-income home-owner family. For any energy-saving repair or upgrade of your home, you can get tax credit equal to the amount of 30% of the repair or upgrade expense. The maximum amount allowed is $1,500. The upgrade or repair must be done between January 1, 2009 and December 31, 2010. Before making any purchase, make sure the product or project is eligible for the credit.


This law provides funding to create a contingency fund through 2010 for the welfare program called Temporary Assistance for Needy Families, which provide cash assistance to the needy families. Go to the Department of Social Service in your area directly to find out about this program.

Food stamp recipient will get a raise of 13.6% increase in food stamp payment. A family of four, for example, would get an additional $80 on top of the $588 per month they receive currently.

350 million dollars will be given to food bank and local groups providing food and homeless shelter and elderly nutrition service. So homeless people, do not give up. Help is on the way.

If you are newly graduated or have graduated but cannot find a job since then, it is a good time now to go back to school to upgrade yourself. This law has appropriated 31.4 billion dollars to increase student financial aid in grant and scholarship for higher education, fund college’s work-study programs and provide refundable tax credit of $2,500 for tuition and book expense.

The law allow those who buy a new car, or motor-cycle to deduct state, and local sales tax as well as any excise tax charged in the purchase. This deduction is available for those who make less than $125,000 a year for each individual , or $250,000 for each married couple. The purchase must be made between February 17 and December 31 of 2009.

Unemployment claim benefit are extended to a total of additional 20 weeks, and 13 weeks on top of 20 weeks if they live in what is deemed a high unemployment state, in addition to the regular unemployment compensation. The regular unemployment compensation of roughly $300 will temporarily be increased by $25. The first $2,400 of unemployment benefit in 2009 will also be exempted from federal income tax.

The law includes provisions to help eligible jobless workers pay for health insurance under Cobra. Cobra coverage allows newly unemployed workers to keep health insurance provided by their former employers for a period of time. For workers who have been laid off between Sept. 1, 2008, and Dec. 31, 2009, the government will subsidize 65% of their premiums under Cobra for up to 9 months. Those people laid off between Sept. 1, 2008, and the day the stimulus law goes into effect, and who did not sign up for Cobra, will get an additional 60 days to do so and receive the subsidy. The subsidy will be limited to those whose income for the year is $125,000 or less ($250,000 for couples filing jointly).

Another provision provides states funding to help pay for expanded Medicaid rolls for workers who’ve lost their jobs and can’t afford health care on their own or can’t get Cobra coverage because their former employer doesn’t offer a health care plan.