How stimulus can help your wallet
Congress appears close to finalizing the economic recovery plan. Here's a look at some of the likely provisions for individuals.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: February 11, 2009: 10:36 PM ET
NEW YORK (CNNMoney.com) -- Key lawmakers in the Senate and House said Wednesday they had reached a compromise on a final economic recovery package.
The exact language of the compromise bill is still being drafted, and many measures are expected to be amended. But the final Senate version, which was approved Tuesday, provides a framework for a final bill.
Using that Senate version of the bill as a guide, here's a look at what the financial rescue package might mean for you. Keep in mind, lawmakers involved in the negotiations said some tax breaks directly affecting individuals have been scaled back.
As final details become available, CNNMoney.com will update this list.
Make Work Pay Credit: The bill provides a $500 credit per worker and a $1,000 credit per dual-earner couple. The full credit would be paid to people making $70,000 or less ($140,000 per dual-earner couple). It would also be refundable, which means that even very low-income families who don't make enough to owe income tax would be able to claim it. Estimated cost:$139.4 billion.
One-time payments to those who don't work: For seniors who don't work, as well as disabled veterans and retired railroad workers, the bill provides a one-time $300 payment. Estimated cost: $17 billion.
Break for higher income families: The bill includes a one-year provision to protect middle- and upper-middle-income families from having to pay the Alternative Minimum Tax. The AMT was intended primarily for high-income taxpayers but has in recent years threatened to engulf those lower down the income scale. Estimated cost: $70 billion.
Temporary deduction for car buyers: The bill would let those who buy a car in 2009 deduct the interest they pay on their car loan as well as the sales tax charged in the purchase. The full deduction would be available to those earning less than $125,000 ($250,000 for joint filers). Estimated cost: $11 billion.
Temporary credit for home buyers: The bill doubles the size of an existing temporary home buyer credit to $15,000. It also would allow all home buyers to claim it. And it removes the requirement under current law that the credit be paid back. Estimated cost: $39 billion.
New college credit: The bill introduces the American Opportunity Tax Credit, a $2,500 credit for higher education expenses. The full credit would be available to those making less than $80,000 ($160,000 for joint filers). Estimated cost: $10.3 billion.
Pell Grants: The bill increases the maximum Pell Grant by $281 in the 2009-10 academic year and by $400 in the 2010-11 academic year. Estimated cost: $14 billion.
Child tax credit: The bill increases eligibility for the child tax credit by lowering the income threshold that must be met to $8,100. That will allow lower income families to claim more of the credit. Estimated cost: $7.2 billion.
Earned income tax credit: The credit will be temporarily increased from 40% to 45% of qualifying earnings for low-income families with three or more children. It also includes a marriage penalty relief provision for couples who qualify for at least a portion of the credit. Estimated cost: $4.6 billion.
Direct lifeline benefits
Health insurance help for the jobless: The bill includes provisions to help eligible jobless workers pay for health insurance under Cobra. Cobra coverage allows newly laid off workers to keep health insurance provided by their former employers for a period of time.
One of the provisions offers a government subsidy -- 50% of premiums for 12 months -- to help out-of-work Americans pay for healthcare. Estimated cost: $20 billion.
Another 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. Estimated cost: $87 billion.
Unemployment benefits: The bill provides jobless workers with an additional 20 weeks in unemployment benefits, and 13 weeks on top of that if they live in what's deemed a high unemployment state, of which there are about 30 currently. Estimated cost: $27 billion.
In addition, the weekly unemployment benefit will temporarily increase by $25 on top of the roughly $300 jobless workers currently receive. Estimated cost: $8.8 billion
Plus, the first $2,400 of benefits in 2009 would be exempt from federal income taxes. Estimated cost: $4.7 billion.
Also included in the bill is an incentive for states to provide unemployment insurance coverage for part-time workers and for workers who quit their jobs for compelling family reasons. Estimated cost: up to $2.6 billion.
Food stamp payments: The bill includes a provision would increase food stamp payments by 12%, so a family of four would see an additional $71 on top of the $588 per month they receive currently. Estimated cost: $16.5 billion.
Help for needy families: The bill provides $2.3 billion to states to create a contingency fund through 2010 for the welfare program called Temporary Assistance for Needy Families, which provides cash assistance to the needy. Estimated cost: $2.3 billion.
First Published: February 11, 2009: 5:51 AM ET