With each passing day the national and local news reports and conversations around the table at the local coffee shop, have the American public in panic mode.
The economic problems being experienced by all of America and overseas affects each and everyone of us. The concerns of job security, and worry of being able to provide for family and loved ones.
Nationally and locally the economic news is bleak, with major corporations cutting back, requesting government assistance or disbanding long standing divisions and laying off hundreds and in some cases thousands.
On Feb. 13, the House of Representatives and Senate approved the American Recovery and Reinvestment Act of 2009.
President Barack Obama signed the historic bill into affect, starting immediately.
The stimulus plan is intended to provide tax relief to the American population and aid in the recovery of budget deficits of state governments.
With the influx of funding from the federal government, states will be able to continue to provide some essential services and fund new projects which will create new job opportunities nationwide.
The trickle down affect of plant closures and layoffs has touched every facet of society and economic level.
With many programs in jeopardy, this stimulus plan is designed to allow tax breaks and financially assist displaced workers drawing unemployment benefits.
Tax Relief dollar figure amounts -- include $15 billion for Infrastructure and Science, $61 billion for Protecting the Vulnerable, $25 billion for Education and Training and $22 billion for Energy, so total funds are $126 billion for Infrastructure and Science, $142 billion for Protecting the Vulnerable, $78 billion for Education and Training, and $65 billion for Energy.
The outline goals of the plan include:
* Doubling the renewable energy generating capacity over three years.
It took 30 years to reach current levels of renewable energy production. This plan will double that level over three years -- enough power to supply six million American homes.
* Weatherize 75 percent of federal buildings and at least two million homes.
* Computerize American health records in five years, reducing medical errors and saving billions of dollars in health care costs.
* School modernization programs to upgrade 10,000 schools and improve the learning environment for approximately five million children.
* Repair and upgrade the nations road and bridge system.
This investment will be the largest since the creation of the national highway system in 1950.
* Making Work Pay tax credit will allow workers to adjust their withholdings and families with children the extended and increased relief of the Child Tax Credit.
* The bill also requires an unprecedented level of government transparency, oversight, and accountability.
How will this affect me?
The stimulus package has provisions which will affect your paycheck immediately.
For the years 2009 and 2010, the Making Work Pay tax cut means up to $400 for individual and $800 for couples, through a reduction in income tax withholding -- in other words, bigger paychecks.
Eligible workers may need to work with their employers to ensure any adjusted income tax withholding is appropriate for their situation. For example, if all working taxpayers are automatically transferred to the new reduced withholding amount, certain taxpayers may actually owe more taxes when they file their 2009 and 2010 returns.
Eligible self-employed taxpayers can adjust their quarterly estimated payments.
For those taxpayers who do not receive the full amount this year, they will receive the remainder as a credit on their next year's return.
Social Security and SSI recipients, retired and disabled veterans and railroad retirees will get a one-time payment of $250.
The Social Security Administration and Veteran Administration will provide the information about who qualifies for this payment.
Individuals on a federal or state retirement program who do not receive Social Security benefits, can claim a one-time $250 credit, when they file their 2009 tax returns.
If you do receive a retirement income and are still receiving a working paycheck, you will not be allowed to get credit for both or "Double-Dip."
The Recovery Act also has stimulus provisions for the unemployed. Many will receive a boost of $25 in their check.
In addition, the first $2,400 in assistance benefits will be exempt from federal tax in 2009. Eligible unemployed workers paying for COBRA will benefit from a 65 percent federal subsidy for their monthly insurance premiums.
For families with children, the Recovery Act has expanded the Child Tax Credit.
Families begin qualifying for credit with every dollar earned over $3,000. This change could translate into a refundable credit of up to $1,000 for each qualifying child under 17. Refundable credits give taxpayers a real boost because if the person has no tax liabilities, the credit is issued in the form of a refund.
The Act also increases the Earned Income Credit for families with three or more children. The previous EIC benefits were capped at two children. The new Act would increase the beginning point of the phaseout range for all married couples filing a joint return. These changes apply to 2009-2010.
In an effort to make homeownership more affordable, the Act will allow an $8,000 tax credit for first-time homebuyers. Unlike the incentive passed last year, first-time homebuyers will not have to repay the credit if they own and live in the home for three years.
To qualify for this credit, eligible homebuyers must make their purchase between Jan. 1, 2009, and Nov. 30, 2009.
Taxpayers who have made a first-time home purchase, and already filed their 2008 return, can take advantage of this credit by filing an amendment.
If you filed 2008 returns already and claimed the $7,500 credit, you may amend those returns to claim the balance of this change.
The Act provides for a lifetime credit cap change from $500 to $1,500 for energy-efficient improvements to existing homes. This would include the installation of new furnaces, energy-efficient windows and doors or insulation.
Nearly four million low income students will now be able to qualify for a partly refundable $2,500 tax credit under the American Opportunity Tax Credit.
The Act allows for expanded tax credit for computer and computer technology costs in 2009-2010. Previously, eligible expenses included only tuition, room and board and books, supplies and equipment that were required for attendance at the school.
Taxpayers will be able to gain a tax break on new auto purchases. The Act allows for the deduction of state and local sales and excise taxes paid on the purchase of new cars, light trucks, recreational vehicles and motorcycles purchased from the enactment date of the Act through the end of the year.
This deduction is subject to phase out for taxpayers with AGI in excess of $125,000 for individual or $250,000 for joint filers.
For individuals going green, and purchasing a plug-in Hybrid or for plug-in conversion between the enactment date and before 2012, they will be allowed a tax credit of up to $7,500.
According to a report on OzarksFirst.com, the state of Arkansas is slated to receive $2.1 billion in recovery funding.
Arkansas Gov. Mike Beebe stated his goals for the state's share of the economic stimulus money. Officials hope $750 million will filter through the Department of Human Services. $223 million is expected to be used for the food stamp program and $7.2 million to be used for Head Start.
Members of an Arkansas congressional delegation announced the release of $350 million in stimulus funds to be used on state highway projects.
The state will be opening up a Web site soon, to allow Arkansas residents to track stimulus money expenditures.
A press release dated Feb. 26, from the Missouri Budget Project, estimates the $4.3 billion in federal funds the state will receive over the next two years, will boost the state's economy, maintain basic services and create 98,000 jobs. Additional information is available on-line at: www.MoBudget.org
The state of Missouri has already received funds and according to a KY3 TV Web site report, may have been the first in the United States to be able put the stimulus money to use.
A construction crew, contracted to do work on U.S. 60 between Monett and Republic, was just waiting for President Obama to sign the stimulus package, before they could get started. The company hired back some of their employees who had been laid off and were expecting to add some additional new jobs as a result of stimulus funding.
The U.S. Government has set up an information Web site, www.Recovery.com, which is accessible for more detailed information and has the complete bill available to the public.
H & R Block tax service has ongoing information about the Recovery Act on-line www.digits.hrblock.com. They are also providing tax tips at www.hrblock.com/taxes/tax-_tips or via phone at 1-800-HRBLOCK.
In the face of economic crisis in both the industrial and private sector, the American Recovery and Reinvestment Act represents a significant investment in the country's future.