American Recovery and Reinvestment Act of 2009 Breakdown – Chart of the Day

The House has already voted to approve the $789 billion economic stimulus plan (called American Recovery and Reinvestment Act of 2009) President Obama has sought since he took office less than a month ago. The Senate will take on the bill later today and it could be sent to the President for his signature as soon as this weekend.

Early this week, I posted highlights of the stimulus package. But that post was based on data that some are no longer in the final bill, or have been changed a lot as the Congress wanted to keep the overall cost down. For example, first-time homebuyers can get $8,000 tax break instead of the $15,000 original proposed and approved by the Senate. Also tax cuts for couples have also been reduced to $800 ($400 for single) instead of 1,000. Even though details of the final bill will take some time to emerge, I was able to draw this pie chart based on this rough breakdown on Portland Channel 8 News.

The top 5 largest spending/tax cuts are:

1. Health Care: About $141.3 billion
2. New Tax Credit: About $116 billion
3. Infrastructure: About $89.7 billion
4. Education: About 87.3 billion
5. Energy: $86.2 billion

For most of us as taxpayers, we are more concerned about individual tax credits, such as for buying a home, purchasing a new car, and paying qualified college expenses, etc.,  in the stimulus plan because they are what we can directly benefit from. According to a publication by the CCH Group (PDF file), individual tax incentives in the American Recovery and Reinvestment Act of 2009 economic stimulus plan cover include:

• Making work pay credit: $400 per worker and $800 per couple tax credits in 2009 and 2010 in the form of reduced paycheck tax withheld. The credit will phase-out when a single earner’s modified AGI is more than $75,000 or $150,000 for married couple filing jointly.
• $250 economic recovery payment: Retired people on Social Security or veterans will receive a one-time payment of $250.
• $8,000 first-time homebuyer credit: First-time home buyers will receive $8,000 tax credit when buying a home in 2009 and you don’t have to pay the credit back after 36 months.
• AMT Patch: The income limits for AMT exemption for 2009 are $70,950 for joint filers and $46,700 for single.
• New car purchase tax deduction: New car buyers will get an above-the-line federal deduction for state and local sales taxes or excise taxes on the first $49,500 of a car’s purchase value. The phase out income limit is $125,000.
• American opportunity education tax credit: For 2009 and 2010, HOPE program will be enhanced to allow up to $2,500 tax credit be claimed against educational expenses. Phase-out begins for singles with $80,000 AGI or $160,000 for joint filers.
• Qualified tuition programs: Withdrawals from 529 college savings account can be used to purchase computers and internet services.
• Earned income tax credit: For 2009 and 2010, EITC will be increased to 40% of the first $12,570 of earned income.
• Child tax credit: The income threshold of the refundable portion of child tax credit is increased to $3,000 in 2009 and 2010.
• Unemployment compensation: For 2009, people who lost their jobs can exclude up to $2,400 unemployment compensation from their income.

Now that the stimulus plan is becoming a law, the Obama Administration wants to hear your opinion on the package. You can give The White House your feedback.

Related Articles You Don't Want To Miss

1. Did TurboTax Mis-calculate My Recovery Rebate Credit?
2. American Households Lost $2.8 Trillion in Net Worth Last Quarter – Chart of The Day
3. How to Claim Recovery Rebate Credit on 2008 Tax Return
4. New Car Buyer Tax Break for 2009
5. 2009 Stimulus Plan Highlights
6. October 2009 Unemployment Rate 10.20% – Chart of the Day
7. Economic Recovery Payment for Social Security Recipients Sent on May 7
8. February 2009 Unemployment Rate 8.1% Highest in 25 Years – Chart of the Day