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Economic Stimulus basics that affect you and I

Posted on February 14, 2009 by Ray Williams (NMLS #216267).

Many have wondered what the breakdown of the stimulus will be. One glaring question most asked to me is “Ray, what will the new first time buyer tax credit be?”

While not all of the details have been released, what I can find so far is limited. Not even the I.R.S website has anything on it. The I.R.S website does have this information for the individual “Making work pay”:

When and how will people get the $400 to $800 “Making Work Pay” tax credit?Taxpayers will not get a separate, special check mailed to them like last year’s economic stimulus payment.

For many taxpayers, the additional credit will automatically start showing up in their paychecks this spring. For people who receive a paycheck, the credit will typically be handled by their employers through automated withholding changes. For some other people, the credit can be claimed when they file their 2009 tax return next year.

More details about the “Making Work Pay” credit will be available soon, including an updated version of the withholding tables contained in Publication 15, (Circular E), Employer’s Tax Guide.

From there I was able to locate some information on the first time home buyer credit. It was scaled back from $15,000 down to $8,000, or 10% of the value of the home. Buyer’s are eligible who buy from the beginning of the year until the end of November. As before there is a pair off in incomes earned for $75,000 to $150,000 (for married couples). The one interesting twist is that it appears if you live in it for 3 years, the credit is forgiven.

Obviously the tax credit details haven’t been fully released, but watch for more to come.

Ray

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