Economic Stimulus Checklist

By: AARP Education & Outreach | March 16, 2009

The recently implemented American Recovery and Reinvestment Act could help you in reaching your retirement dreams. The plan is designed to boost economic activity during this period of financial weakness. But in order to take advantage of it, you must understand what it has to offer. AARP can help. The checklist below outlines the potential benefits of the stimulus package and your “What You Can Do” list to receive them.

Senior Payments

Retired and disabled individuals who are eligible for Social Security, Supplemental Security Income (SSI), Railroad Retirement, or Veterans’ Affairs benefits will receive a one-time economic recovery payment of $250.

If you are married and both you and your spouse are receiving benefits from Social Security or SSI, both of you will get the one-time payment.

The one-time payment will be made by direct deposit or check through the established systems (Social Security, SSI, or in the form in which you usually get your payments).

What You Can Do: Be on the lookout for your deposit or check.

You don’t need to do anything else. Payments will begin to be disbursed no later than mid-June. Those who participated in the program in November, December, or January are entitled to one payment.

Get more information about this one-time payment from the Social Security Administration.

Unemployment Insurance

Unemployment benefits will increase by an additional $25 a week and will be available for an additional 26 weeks.

The unemployment benefits are not subject to federal taxation.

What You Can Do: If you are receiving or are about to file for unemployment, check with your state’s employment bureau for additional information on the duration of benefits.

The increase could start as soon as the first week of March. The extra benefit lasts until June 2010 for those already in the system as of Jan. 1, 2010.

Make Work Pay

Working people with individual incomes of up to $75,000 (and $150,000 for dual-earner couples) will receive a middle-class refundable tax credit in 2009 and 2010. The credit gives up to $400 to individuals and $800 to couples.

What You Can Do: Watch out for additional money in your paycheck.

The additional amount in your paycheck should be around $15 or so, assuming you have 26 pay periods per year. This amount will not take the same form as the stimulus check given in 2008. Simply put, individuals who qualify for the payroll tax credit will have less money in taxes withheld from their paychecks.

Nutrition Assistance

The stimulus bill provides $97 million for the Senior Nutrition program under the Older Americans Act.

What You Can Do: If you need help with nutrition, check with your state and/or local social-services groups.

Government agencies and other groups that provide food and shelter include food banks, homeless shelters, Meals on Wheels, and similar groups.

Job Assistance

The bill adds $120 million to the Senior Community Service Employment program (SCSEP), creating an additional 24,000 jobs.

What You Can Do: If you are looking for work, contact AARP SCSEP
or call toll-free, 1-800-OUR-AARP (1-800-687-2277).

Home Weatherization

The bill provides a 30-percent tax credit of up to $1,500 for the purchase of a highly efficient residential air conditioner, heat pump, or furnace.

The credit can also be used by homeowners to replace leaky windows or put more insulation into the attic.

What You Can Do: When purchasing appliances, keep your eye out for rebates.

Weatherization aid for low-income residents is given out through state groups. To find the list in your area, click on "How Do I Apply for Weatherization?" at the U.S. Department of Energy Web Site.

Reverse Mortgages

The bill increases the loan limit for FHA-insured reverse mortgages to $625,500, permitting greater numbers of older homeowners to tap the equity in their homes to refinance unaffordable mortgages, pay medical bills, or help meet daily living expenses.

What You Can Do: If you feel you might need additional income via a reverse mortgage, see AARP’s information about reverse mortgages.

COBRA (Consolidated Omnibus Budget Reconciliation Act)

If you were laid off after Sept. 1, 2008, and have been paying full COBRA premiums, your cost will be reduced by 65 percent for up to 9 months.

If you were eligible but did not sign up for COBRA when you were laid off, you have 60 days after you get a notice from your former employer in which to apply at the new, lower rate.

This new benefit only applies to laid-off workers.

What You Can Do: If you have been laid off, contact your employer to find out how to sign up and what the new, lower cost will be.

Be sure to visit AARP’s Real Relief for help if you’ve lost your job.

Qualified Individuals (QI-1 and QI-2)

Eligible low-income individuals will be eligible for assistance in paying for their Medicare Part B premiums.

What You Can Do: Contact your local Medicaid office to find out whether or not you are eligible.

Car Deals

If you buy a new car before the end of 2009, you’ll get a deduction for state and local sales taxes, even if you don’t itemize on your tax return.

The credit applies only to the first $49,500 of the cost of the car.

The credit is only available to individuals earning less than $125,000, or $250,000 for joint filers.

Eligible vehicles will include new cars, motorcycles, light vehicles, and RVs.

Next year and in 2011, taxpayers will be able to claim a tax credit up to $2,500 for the purchase of a plug-in hybrid (PHEV) until manufacturers sell more than 200,000 of these vehicles. PHEVs have an electric motor, internal combustion engine, and a battery that can be charged by connecting to an electric grid.

What You Can Do: If you are buying a car this year or next, be sure to claim a tax credit.

Homebuyer Breaks

If you’re buying a home this year, either for the first time or if you haven’t bought a home in the last three years, you’ll get a tax credit of up to $8,000 to help with the down payment.

What You Can Do: Claim the tax credit on your 2009 taxes. Be sure to visit AARP’s Real Relief for more tax information.