I was surprised to learn, because there hasn’t been much discussion about this facet of the stimulus package the Obama administration has set forth, which is ironic, because it by far would affect the most individual people on a direct basis, where many working taxpayers will get extra money in their paychecks simply for working, and the credit will vary per person and their particular situation, but the amount will generally be small. The idea of the credit is that “it pays to work”.
I’m not sure that would really work for the millions that are jobless right now, and that’s the first thing I thought about to be honest, I felt bad because of the name of it, I assume it only works if you are presently employed, not a good thing for those that have been laid off at all. In short, the upshot is that people filing as single will get around fifteen to twenty bucks additional per pay check, and married people filing as married will get about twenty bucks per pay each.
Even those with higher incomes are eligible, singles making and adjusted gross income of up to $75k and couples making up to $150k together. The idea is to back out some of the ordinary taxes that would have been charged per paycheck to make it easier to have more spending money, so that FICA amount that you see on your paystub every other week or every other week will be modestly reduced. It also works as a credit, so those that did not make enough to pay taxes may still get the money.
Those that are eligible for pensions or social security benefits probably will not be getting this small tax credit though. This brings to mind a conversation that I just had with my optometrist as he was putting numbing drops in my eye for the glaucoma test. He told me about several of his friends that were thinking of retiring in the next few years now were putting it off or were seriously considering finding another job for those years. He also told me another sad story about a friend of his who bought a condo in Florida as an investment to help pay for some things for his kids, now grown, and also to give to various charities.
The condo sadly only went for less than half of what it was valued at in this market. This is just an example of how we Americans are being hit from all angles by this prolonged and painful recession, and I’m tired of hearing awful stories all the time. We need hope and we need it fast!