Economic Stimulus Package

So the Economic Stimulus package has passed the house and now must pass the senate.

Confused on what this means? Read the FULL TEXT.
In short if you earned at least 3K in income you will receive the lesser of your total tax liability or $600 as a tax credit. If your total tax liability is less than $300 you will be given a $300 minimum credit. If a joint return is filed these figures are doubled.

If you have any children you will also receive $300 for each of them.
If you make over $75,000 ($150,000 joint) then you will have a 5% penalty against each dollar over that amount. Meaning if you make $87,000 ($174,000 joint) and have no children you will get no rebate, in spite of the fact that you pay so much tax.

Don’t get angered now. Rest assured that a person with 5 qualifying children who made only $3,000 in earned income will receive $1,800 on your behalf. To make matters worse, if a person has two qualifying children and earns at least $3,000 in income they receive $1,210 in EIC plus the $300 credit for them and an additional $300 per child.

I had heard rumor that there may be a cap of two children for figuring the additional credit but that doesn’t seem to be present. So if a person with say 5 children works a month or two a McDonalds and earns 3,000 and then decides that some under the table job is better and earns income that way they would pay -0- Tax. Worse yet, they’d receive $1,210 that they didn’t pay in PLUS an additional $1,800 from this stimulus package. That means that a person who pays no tax receives a grand total of $3,010 in EIC and Stimulus credits. More than the federal government thinks they earned.

Good to know that the government thinks the best way to stimulate the economy is by stealing the incomes of the earners and giving it to someone else to spend. I have a better suggestion.

Tags: Child Tax Credit, Economic Stimulus Package, EIC, HR 5140, Rebate, Tax Rebate