What the stimulus bill means for you

Not a day goes by now without some talk about the "stimulus bill" being discussed by very important people in some very important chamber deep in a crevice of the Capitol building. But with so much news on the plan, the details can become muddy and confusing and before we know it we're completely lost and ready to top off our glass of Pinot Noir and take the dog for another walk before we kneel at the doorstep of Thomas.gov, take a deep breath, and start all over in trying to understand it all.

Of course, the most vital info you need to know about the stimulus bill can be boiled down to just five itty-bitty words: How does it affect me? Simple question, but traversing through all the mucky language can be harrowing. Luckily, that's why you read moi, right? ;)

I've found a fabulous article by the New York Times that does the best job I've seen of simplifying the legislation and informing you of how the stimlulus affects, well...you. Most importantly in regards to:

Income Tax: In 2009 and 2010, there is a tax credit of up to $400 for individuals and $800 for married couples filing their taxes jointly. You calculate your credit, subtracted from other federal taxes you owe, by taking 6.2 percent of your earned income.

Your eligibility for this credit begins to phase out if you’re an individual with an adjusted gross income over $75,000 or a couple with income higher than $150,000.

Unemployment: Normally, you pay federal income taxes on federal unemployment benefits. In 2009, however, you won’t have to pay taxes on the first $2,400 in benefits you receive.

Health Insurance: If you get fired, your company is required, thanks to a law known as Cobra, to allow you to pay to keep your health insurance, generally for up to 18 months.

The problem is, it can cost you $1,000 a month or more to keep the coverage.

Now, the federal government will subsidize 65 percent of the premium for up to nine months. To be eligible, you need to have been forced out of your job between Sept. 1, 2008, and Dec. 31, 2009. Also, your income in the year you receive the subsidy cannot be more than $125,000 for individuals or $250,000 for married couples filing their taxes jointly.

If you lost your job after Sept. 1, 2008, and declined Cobra coverage, you’ll now get another chance. Call your former company in the next two months to find out how this will work.

Social Security: In 2009 a number of retirees and disabled people, including Social Security recipients, will receive a $250 refundable tax credit. The money would arrive within 120 days of the bill’s signing.

First-Time Home Buyer Credit: First-time home buyers are eligible for a refundable tax credit equal to 10 percent of the purchase price of their home, up to $8,000, if they made the purchase after Jan. 1, 2009, but before Dec. 1, 2009. (This gem is for singles who make under $75,000, or a married couples who make under $150,000).

Don't forget the language isn't final, but the above is the gist of it all. Ah, I love the sound of money in my pocket (thank you U.S. government!). [NY Times via CNBC]