Recovery Rebates and Economic Stimulus for the American People Congress completed action on, and the White House signed, bipartisan economic stimulus legislation (H.R. 5140) to help hardworking Americans who are struggling with the high costs of gas, health care and groceries, and to jumpstart our slowing economy and create jobs here at home. Starting in May, Americans will begin receiving Recovery Rebates as a result of the Economic Stimulus package. The package provides rebate checks of up to $600 per individual and $1,200 per married couple, plus an additional $300 per child. This legislation will:
- Put hundreds of dollars into the hands of more than 130 million American families, including seniors and disabled veterans-who will spend it immediately to reinvigorate the economy;
- Build on the child tax credit by offering a one-time rebate of $300 per child;
- Expand financing opportunities for Americans in danger of losing their homes because of the mortgage crisis;
- Promote small business investment in plants and equipment; and,
- Help create 500,000 jobs by the end of the year.
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Getting this bipartisan bill done quickly provides unprecedented tax relief for working Americans and will inject confidence and consumer demand into the economy, promote economic growth, and create jobs. We will take additional action to help American workers and help our economy recover and grow.
Check the status of your rebate on the IRS web site by clicking here>>
Learn More About the Recovery Rebates and Economic Stimulus Act
Broad Tax Rebates for Individuals ($107 billion in 2008 & $117 billion over 10 years) - Tax Cut for More than 130 Million Families. This broad-based stimulus package will provide tax relief of up to $600 per individual and $1,200 per married couple, plus an additional $300 per child. Recovery rebate checks will be sent as early as May, getting money to Americans who will spend it immediately to reinvigorate the economy.
- Unprecedented Tax Relief for Working Families. The measure provides $32 billion in tax relief for 35 million families who work but make too little to pay income taxes -- families who otherwise would not have been included in this recovery effort. More than 19 million of these are families with children. Americans who earned at least $3,000 in 2007 (including from self-employment income) will get at least $300 per single and $600 per couple, plus a child tax credit of $300 per child. Tax rebates that include low- and moderate-income families are 24 percent more effective as stimulus than rebates that leave out these families. [Economist Mark Zandi of Moody's Economy.com]
- Recovery Rebates to 20 Million Additional Seniors and 250,000 Disabled Veterans. The measure provides recovery rebates to anyone who receives at least $3,000 in Social Security income, Railroad Retirement benefits, or veterans' disability payments (including for survivors of disabled veterans). The original House bill provided rebates to 13 million seniors. In total, the measure provides tax rebates to nearly 28 million senior households. Residents of the U.S. territories also will receive the benefit.
- Tax Fairness and Targeted Rebate. The rebates will go to middle-income Americans and those aspiring to it - with $66 billion in tax relief for families making up to $75,000. The wealthiest taxpayers are not eligible for this relief. Tax relief begins to phase out above incomes of $75,000 for a single and $150,000 for a married couple.
- American families are struggling in weakening economy. Family incomes and home prices are down as health care, energy, food, education costs, and mortgage foreclosures have climbed. No wonder American families are falling behind on their bills and consumer confidence is at a five-year low.
- Clarifies that undocumented workers cannot get recovery rebates. The measure includes safeguards to ensure that undocumented workers will not obtain rebates. It requires that all people must have valid Social Security numbers to receive recovery rebates. Undocumented persons cannot hold Social Security numbers and will not be able to access a rebate.
Jumpstarting the Economy - Relief Helps Financially-Pressed Americans - Putting Money into the Economy. Economists estimate that each dollar of broad-based tax cuts leads to $1.26 in economic growth. Congress will develop a plan of further assistance, which could include extension of unemployment benefits, Food Stamps, state and local assistance, and Medicaid.
Helping Families Avoid Foreclosure
- Increasing Affordable Refinancing Opportunities and Liquidity in Housing Market. For 2008, the bill increases the FHA loan limits up to $729,750, to expand affordable mortgage loan opportunities for families at risk of foreclosure through the Federal Housing Administration. To enhance credit availability in the mortgage market, the measure includes an increase in the loan limits for single family homes from Fannie Mae and Freddie Mac from $417,000 up to $729,750 that covers loans made between July 31, 2007, and December 31, 2008.
Encouraging Business Investment ($44 billion in 2008, $7.5 billion over 10 years - Small Business Expensing. The bipartisan plan doubles the amount small businesses can immediately write off their taxes for capital investments made in 2008 from $125,000 to $250,000, for purchases of new equipment of up to $800,000 (from $500,000).
- Bonus Depreciation. It provides immediate tax relief for all businesses to invest in new plants and equipment by speeding up depreciation provisions, so that firms can write off an additional 50 percent for investments purchased in 2008.
| FREQUENTLY ASKED QUESTIONS What is the recovery rebate? The recovery rebate is the payment now of a new tax credit for the 2008 income tax year. The check is intended to stimulate the economy. Am I eligible for a stimulus check? Generally, you are eligible if you file your 2007 income tax return reporting tax liability or have earned income, social security income, Railroad Retirement benefits, or disabled veterans’ benefits of more than $3,000. The credit phases out for those taxpayers with an adjusted gross income of $75,000 ($150,000 for a joint return) or more. If you are claimed as a dependent on someone else’s return, such as your parents, you are not eligible. What do I need to file to get a stimulus check? Most taxpayers simply will need to file a 2007 income tax return. There is no additional form needed, the IRS will automatically send it to you. When will I receive my rebate? People who use direct deposit will start receiving payment on April 28th. The Treasury Department expects to begin mailing checks starting May 9th. Check the status of your recovery rebate here>> What will be the amount of my recovery rebate? Taxpayers generally will receive a rebate check of up to $600 ($1,200 in the case of a joint return). In addition, a taxpayer is eligible for an additional $300 for each qualifying child. The IRS is expected to have a calculator on its website for taxpayers to use to calculate the amount of their rebate. How can I get more information? The IRS will mail two informational notices to taxpayers advising them of the stimulus check. The IRS website (www.irs.gov) also has information on the economic stimulus check. You can also call the IRS at 1-800-829-1040. LINKS The Internal Revenue Service Update on the Economic Stimulus Package>>
Treasury Fact Sheet on How the Economic Stimulus Package Will Benefit Americans>> |
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