American Recovery and Reinvestment Act (ARRA)

[Minuteman]

Recently, President Obama signed into law the American Recovery and Reinvestment Act (ARRA), also known as the 2009 economic stimulus plan. Millions of individuals will benefit from this plan. Below is an short overview of the plan.

Description:

1 - Getting $$ back in the hands of people who need it the most
· For the employed: up to $400/$800 in 2009 and 2010 (Making Work Pay Credit). Probably will be administered via reduction of payroll tax withholding with true-up on tax return.
· For the retirees/veterans/disability on SS: $250 one time check in 2009
· For the unemployed: first $2,400 exempt from federal taxation in 2009, increase of $25/week, extended time period, 65% break on COBRA premiums for 9 months

2 - Helping more of those that have less
· EITC - additional benefit for larger families (3 or more)
· Child Tax Credit - will help more lower income families by lowering the threshold from $8,500 in CY2008 to $3,000

3 - Making Home Ownership more affordable
· 1st time homebuyer credit $8k (was formerly $7.5k), removes repayment requirement, applies to homes purchased 1/1/09 - 12/1/09
· Energy efficient improvement tax credit to residential property (removes caps and increases lifetime limit from $500 - $1,500)

4 - Increasing Access to Higher Education
· New education credit of up to $2,500 for 4 years of college (American Opportunity Tax Credit)
· Now can use Section 529 plan $$ to buy a computer (and related technology/equipment) for college

5 - Going Green in the Garage - new vehicle
· Tax deduction of the sales tax paid on the purchase of new vehicle in 2009.
· Tax credit for plug-in hybrid cars (2010 - 2012)