President Signs the Economic Stimulus Act of 2008

President Bush signed the Economic Stimulus Act of 2008 (H.R. 5140) today. The Act provides a rebate to individual tax filers who satisfy specific income requirements and special depreciation allowances to businesses. In addition, the act would raise the loan limit for the Federal Housing Administration’s (FHA’s) single-family program.

According to the White House's fact sheet, the Act

• Is large enough to have an impact, amounting to more than $152 billion this year, or about one percent of GDP.
• Provides tax rebates to 128 million American households.

Payments will be sent through late spring and summer. Under the Act's rebate provisions:

• Individuals and families are eligible to receive up to $600 for individuals and $1,200 for couples. A minimum of $300 per person and $600 per couple would be available to those with at least $3,000 of earned income. This relief would be available to everyone with adjusted gross income less than $75,000 for singles and $150,000 for married couples filing jointly. It will be phased out for taxpayers above those income thresholds. Taxpayers may qualify by filing a tax return for 2007 and including a valid Social Security number on their tax return.
• Everyone eligible for this relief would also receive an additional $300 per child. For example, this would mean up to $1,800 of tax relief for an eligible couple with two children.
• Recipients of Social Security and certain veterans' benefits are also eligible for rebates. Those who receive at least $3,000 from any combination of benefits from these programs will receive rebates. The IRS and Treasury Department will be working closely with the Department of Veterans Affairs and the Social Security Administration, along with beneficiary organizations, to ensure that all eligible individuals are able to receive their payments.

The Congressional Budget Office estimates that the Economic Stimulus Act of 2008 will:

• Decrease revenues by $114 billion in 2008 and by a net amount of $82 billion over the 2008-2018 period; and
• Increase direct spending by $38 billion in 2008 and $42 billion over the 2008-2009 period.

Resources: Legislative resources avalable on LC's Thomas plus a great collection of related materials on TaxProf Blog. [JH]