Details on the Stimulus Package

On February 13, President Bush signed the bipartisan Stimulus Package into law. This is a summary of its details.

  Rebate checks:

• Taxpayers must file a 2007 tax return to receive the rebate.
• Taxpayers who pay at least $1 in taxes or have at least $3,000 in income will be eligible for rebate checks. The checks will be in the amount of 10 percent of the first $6,000 of taxable income for single filers and $12,000 for couples filing jointly, for a maximum of $600 for individuals and $1,200 for couples.
• A taxpayer will receive an additional $300 for each child claimed on the return, as long as the child has a valid Social Security number and at least one parent has a valid Social Security number.
• Taxpayers with earned income plus Social Security or veterans’ benefits of at least $3,000, or taxable income is at least $1, are eligible for at least a $300 rebate.
• The amount of the rebate check for individuals with incomes above $75,000, and couples with incomes above $150,000, will be phased out.
• Taxpayers must have valid Social Security numbers and their names much match their Social Security numbers. The IRS will only send one check per Social Security number.
• Rebate checks will be mailed beginning in May and through the summer.

For more detailed information on the tax rebates, visit the IRS’s Information on Stimulus Package page.

To check if you qualify for the IRS’ free tax preparation and electronic filing, visit the IRS home page.

  Business tax provisions:

• For 2008, the Bonus Depreciation allows 50 percent of eligible investment (generally equipment) to be deducted when incurred.
• For 2008, small businesses can deduct the amount of eligible investment (generally equipment) expensing from $128,000 to $250,000; with a phaseout beginning at $800,000 instead of $510,000.

  Housing provisions:

• The law would allow Fannie Mae and Freddie Mac to purchase qualifying mortgages originated between July 1, 2007, and December 31, 2008, up to a value of $729,750 in high cost areas, which would include California. This would be an increase above the current conforming loan limit of $417,000. The limit for any area would be the greater of the 2008 conforming loan limit ($417,000) or 125 percent of the area median house price, and no higher than 175% of the 2008 conforming loan limit ($729,750).
• It also grants the Federal Housing Administration (FHA) temporary authority to insure mortgages in high cost areas up to this $729,750 limit. The authority would expire December 31, 2008. Currently the FHA limit ranges from $200,160 to $362,790 in high-cost areas.

(Source: Congressional Research Service and staff analyses.)

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