Dear 12^th District Constituent:

 

Congress recently passed the Economic Stimulus Act and the President signed it into law.  Congress and the President worked to speed this legislation through the process to help individuals, families and businesses cope with the current economic slowdown and to help stimulate our slow economy and reduce the prospect of a recession.    

 

While the stimulus package has received a lot of coverage in the press, there has been some confusion as to who benefits and who does not.  The information below outlines how the stimulus package is likely to affect you.

 

Payments to Individuals

 

• Provides up to $600 payments for individual taxpayers ($1,200 for married couples who file jointly) and an additional $300 per child.  To receive a payment an individual or married couple must file a 2007 tax return, even if they didn’t receive enough income to require a tax return to be filed.

 

• Payments will be reduced for individual filers who made more than $75,000 in 2007 ($150,000 for married couples filing jointly) and phased out completely for filers who made more than $87,000 in 2007 ($174,000 per year for married couples filing jointly).

 

• Provides a minimum payment of $300 for individuals ($600 for married couples) who had “qualifying income” of at least $3,000 in 2007.  “Qualifying income” includes Social Security benefits, benefits paid to disabled veterans and earned income that qualified the filer for the Earned Income Tax Credit. 

 

• Payments will be sent beginning in May but won’t be sent until an individual or joint 2007 tax return has been received and processed by the Internal Revenue Service.

 

• Individuals or married couples will not be taxed on the stimulus payments they receive and the payments will not be considered income for purposes of determining eligibility for other federally funded programs.

 

Benefits for Businesses

 

Businesses are strongly encouraged to consult their accountant for details about the following changes designed to stimulate investments by businesses.  Depending on the kind of investments made in machinery, equipment and structures during 2008, businesses may be allowed to:

 

• Deduct as an expense the entire investment up to $250,000 and a reducing part of the investment between $250,000 and $800,000; or

 

• Deduct as an expense up to 50% of the investment and depreciate the balance of the investment.

 

 

Benefits for Mortgage Borrowers

 

The Economic Stimulus Act increased the maximum amount of loans that the Federal Housing Administration (FHA) is authorized to insure for the balance of 2008 as follows:

 

 

County               Old FHA Limit                      New FHA Limit

Guilford                   $200,160                                      $271,050

Forsyth                          $200,160                               $271,050

Davidson                       $200,160                               $271,050

Rowan                           $200,160                               $271,050

Cabarrus                       $230,470                               $303,750

Mecklenburg                 $230,470                               $303,750

 

The bill also increased the “jumbo” loan limit for loans that Fannie Mae and Freddie Mac may purchase in some high-cost areas in the country.  However, this change will not impact any counties in the 12^th district where the “jumbo” loan limit will continue to be the current amount of $417,000.

 

I hope you find this information helpful and if you have any additional questions, please don’t hesitate to contact my office.

 

People who use direct deposit will start receiving the rebate on Monday, April 28, with the first paper checks going out starting Friday, May 9.

 

Sincerely,

 

Melvin L. Watt