President Barack Obama signed an economic stimulus bill in February 2009 in an effort to boost the struggling economy. There are several key provisions within this bill that individuals and businesses need to be aware of.

First, there is now an $8,000 tax credit for first-time home buyers for homes purchased between January 1, 2009, and December 1, 2009. This credit phases out for individuals earning more than $75,000 and couples earning more than $150,000.

There is also a refundable tax credit of $400 per person and $800 for couples in 2009 and 2010. It is calculated at a rate of 6.2 percent of income and again phases out for individuals whose adjusted income is greater than $75,000 and for couples whose adjusted income is greater than $150,000.

A one-time payment of $250 is further provided to Social Security beneficiaries, railroad retirees, and veterans receiving benefits from the Department of Veterans Affairs. State government retirees who are not eligible for Social Security will also receive this payment.

The earned income tax credit for low-income workers who have three or more children, and a greater amount of said workers are eligible for the refundable child tax credit. The income floor is $3,000 for 2009 and 2010, a sharp drop from the previous $8,500 floor.

A $2,500 credit for college education expenses is also in the bill, which is phased out for individuals earning more than $80,000 and couples earning more than $160,000.

As for businesses, there are many new provisions designed to reduce economic and tax pressure, including equipment write-offs, deferral on repurchased debt, and tax breaks on capital gains from stock sales.

The impact of this stimulus package is unique for each individual or business entity, and it is always prudent to seek the advice of qualified financial and tax professionals in order to maximize your benefits.

Filed under: Taxation