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July 24, 2014

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TAX CUTS:

$11 extra in pay is your weekly slice of stimulus

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If you haven’t noticed it yet, look for an extra $11 a week in your paycheck, starting today, thanks to President Barack Obama and supporters in Congress.

Nearly 1 million Nevadans should start receiving extra cash as part of the president’s $787 billion American Recovery and Reinvestment Act. In hard-hit Nevada, Democratic Rep. Dina Titus said the tax credit will “put money back in the pockets of Nevada’s workers immediately.”

“During this tough economic time, this boost in workers’ paychecks can have a big impact on families struggling to make ends meet,” Titus said.

The tax credit of $400 annually per worker or $800 for each working couple took effect as soon as the bill was signed into law in mid-February. Employers had until today to begin making the change in workers’ paychecks.

Rather than a lump sum, like the $600 stimulus checks Congress gave workers last year, this credit will boost paychecks throughout the year.

Workers qualify until they earn $75,000 annually ($150,000 for couples), when the credit will begin to be phased out. The credit is not available for higher wage earners — those making $95,000 annually or $190,000 for couples.

For the remaining nine months of this year, the $400 amounts to a maximum of about $11 a week. The new credit will continue again through 2010. Spread across the entire year, however, the maximum weekly amount will fall under $8.

Four hundred dollars a year “might not seem to most people very much,” Sen. Harry Reid, the majority leader, said Tuesday. “It might mean a person could buy over the year several more bags of groceries, fill your tank with gasoline quite a few extra times, maybe buy a lot of supplies for the kids, maybe even clothes for the family.”

Nevadans will welcome the extra cash. The state is among the hardest hit in the recession. Unemployment stands at 10 percent. Nevada has the nation’s top housing foreclosure rate, and personal bankruptcy filings are at an all-time high.

Economists say dollars given directly to those who need them most have some of the biggest bang for the buck. They create a multiplier effect as they are quickly spent in the economy.

A spokesman for the Internal Revenue Service suggests taxpayers visit the agency’s Web site at www.irs.gov to estimate their withholding. You don’t want to end up owing Uncle Sam next April.

The recovery bill was approved along party lines in the House, with Titus and Rep. Shelley Berkley voting in favor. Republican Rep. Dean Heller joined every single House Republican in voting no.

In the Senate, Reid voted for the bill. Republican Sen. John Ensign voted against.

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