2009 AMERICAN RECOVERY AND REINVESTMENT ACT

President Barack Obama with the congress and senate is working diligently to sign an $800 billion-plus stimulus package aimed at helping brake our nation’s steep economic decline.

Although the details are not fully ironed out, please find a high level summary of the proposed stimulus plan for both businesses and individuals.

The American Recovery and Reinvestment Act, to save and create jobs, get our economy moving again, and transform it for long-term growth and stability. The landmark legislation is the first dramatic new investment in the future since the creation of the interstate highway system a half century ago.

The act will accomplish the following:

Personal:

Worker's credit: Provides immediate relief to 95 percent of American workers through the "Making Work Pay Tax Cut" A credit of up to $400 per worker ($800 per couple filing jointly), phasing out completely at $200,000 for couples filing jointly and $100,000 for single filers

Child credit: Cuts taxes for the families of millions of children through an expansion of the child tax credit (allowing families to begin qualifying for the child tax credit with every dollar earned over $3,000).

Earned income tax credit: Expands the Earned Income Tax Credit by providing tax relief to families with three or more children and increasing marriage penalty relief

Higher education costs: Helps more than 4 million additional students attend college with a new, partially refundable $2,500 tax credit for families

Alternative Minimum Tax: Protects 26 million middle-class families from being hit by the AMT

First time home buyer credit: Helps first-time homebuyers and strengthens the housing market by enhancing the current credit for first-time home purchases with the removal of the repayment requirement.

New automobile purchases: Provides incentives to buy new cars, including light trucks and SUVs, with a tax deduction for State and local sales taxes paid on the purchase

Unemployment benefits: Temporarily suspends the taxation of some unemployment benefits

Business:

Capital purchases: Helps recover costs of new capital investments through extending the bonus depreciation and increased small business expensing for businesses making investments in plants and equipment in 2009.

Property, plant and equipment investments: Expensing for investment in new plants and equipment, loss carry back for small businesses, a delay of the 3% withholding tax on payments to businesses that sell goods or services to governments, and a cut in the capital gains tax cut for investors in small businesses who hold stock for more than five years.

Debt burden: Reduces debt burdens by delaying the tax on businesses that have discharged indebtedness, which will help these companies strengthen their balance sheets and obtain resources to invest in job creation.

Job creation: Incentives to create new jobs with tax credits for hiring recently discharged unemployed veterans and youth that have been out of work and out of school for the 6 months prior to hire.

Health technology: Physicians will get bonuses of between $44,000 and $64,000 if they computerize medical-records systems. Hospitals will get as much as $11 million