FEDERAL TAX REBATES EYED

JANUARY 28, 2008: Association officials are closely monitoring developments in Washington D.C. relative to the so-called tax rebates now being debated on Capital Hill. The tax rebates are a critical part of a larger Economic Stimulus Package endorsed by President George W. Bush and passed by the US House last week. Now before the US Senate, the proposal is under considerable scrutiny as the details are being worked out.

 

Under the version passed by the House and supported by President Bush, income from Social Security and pensions would not be considered “earned income” in order to qualify for the tax rebate, which could be as much as $600 per person. Senate Leaders, including MA Senators Kennedy and Kerry, have filed their own proposal that does count Social Security as “earned income”. At this time, it is unclear as to whether or not pensions would also be classified as “earned income”. 

 

While the Senate may vote later this week on its version of the bill, many differences remain to be worked out across party lines and between the various branches of the federal government before the proposal reaches the President’s desk and is signed into law. 

 

Bush/House Plan: 

  1. Social Security and pensions are not considered “earned income”.
  2. Retirees would qualify only if they have at least $4,000 in annual taxable “earned income”.
  3. Sliding scale used for married couples with taxable incomes between $4,000-$160,000.
  4. Couples rebate ranges from $600-$1,200, depending on income.
  5. Sliding scale for singles with taxable income between $4,000-$80,000.
  6. Single rebate ranges from $300-$600, depending on income.
  7. Rebate of $300 for each dependent child.
  8. No extension in unemployment benefits.

Senate Democrats Proposal:

  1. Social Security income will be considered as earned income (Pensions?)
  2. Earned income starts at $3,000 of taxable income.
  3. Every American with a taxable income of at least $3,000 will receive $500.
  4. Children get $300 each.
  5. Unemployment benefits are extended by 13 weeks.
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