The economic stimulus package is a huge, complicated document and I haven't even made a dent in reading it yet. However, I have found a few key points that seem to apply to many military members.
- A reduction of $400 per year in payroll taxes for a single employee, and $800 per year for a working married couple. Beginning in April, employers are authorized to withhold approximately $65 per month less in taxes. This means that your pay will be slightly more beginning in April. There are income limits, phaseouts and eligibility restrictions that apply, but very rarely to military members. There will not be a separate check issued as was done last year.
- $8000 first time home buyers tax credit for eligible home purchases made between January 1, 2009 and December 1, 2009. I certainly wouldn't run out and buy a house just because of this credit, but it will be a nice bonus if buying a home this year was already in your long-term plans.
- Tax credit for sales taxes paid on new car purchases. I rarely recommend buying a new car, but if you've decided that is the best choice for your situation, then at least you'll see a refund of the taxes.
- Increased educational tax credits and Pell Grants. Great if you have a family member in college!
- Homeowner's Assistance Program for Military Members: If you purchased a home prior to July 1, 2006, used it as your primary residence, and you are selling your home due to reassignment, base closure, combat injury, or death of the military member, you are eligible for this program. See this Washington Post article for more information. The details haven't been finalized yet, but I expect it is coming soon. I know this will be welcome relief for qualified homeowners.
It looks like our family is only eligible for the first benefit, but I know that there are many military families who will be able to take advantage of one of the other benefits as well. These seem to be the top issues the will affect military members. I'll let you know as more information is released.