Economic Stimulus Act of 2008

Facts on Economic Stimulus Act:

• Signed into law on February 13, 2008 by President George W. Bush.
• Total package worth about $168 billion over two years and will add directly to the U.S. federal deficit.
• Over $100 billion in advance payments (rebates) to 120 million American households.
• Business incentives adding up to $44 billion in tax relief.
• Allows nearly 200,000 home owners refinance their homes.
• Assists approximately 138,000 Americans achieve home ownership.

To receive a tax rebate, a completed 2007 tax refund form needs to be filed by April 15, 2008.

In early May 2008, the IRS will begin issuing tax rebates to eligible taxpayers. Most rebates will equal the amount of taxes paid on 2007 income tax returns. The maximum amount on rebates will be $600 for individual taxpayers and $1200 for married couples filing joint returns.

For taxpayers who owe little or no money to the IRS, the Economic Stimulus Act provides a minimum tax rebate of $300 ($600 to married taxpayers filing joint returns) for taxpayers with an earned income of at least $3000. This includes recipients of Social Security and certain veterans’ benefits.

All eligible taxpayers will receive an additional $300 each for children under 17 years old. There is no maximum number of children that can be claimed under the new law.

1. Small business expensing limits will be raised to $250,000, from $128,000. A maximum equipment investment of $800,000 will apply to the new expensing limits.
2. Deduction amounts on depreciable property, such as equipment and software, will be increased to 50%, from 30%.

As part of the new package, both Federal Housing Association (FHA) and Government Sponsored Enterprises (GSEs) will have an increasing in lending limits until the end of 2008.

The intention of increasing lending limits is to assist more Americans in achieving home ownership while helping struggling homeowners refinance and potentially keep their homes.