New Bailouts for Taxpayers ... Sort Of

taxpayers

Where's my bailout?

That's the question many struggling Americans ask when they hear about the trillions of dollars pumped into AIG, Bank of America, General Motors and other large corporations.

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The truth is that there will be no trillion-dollar bailouts for individual Americans. But there are a variety of measures beginning to take effect that are meant to prop up family finances. Most of these measures are contained in the economic stimulus legislation known as the American Recovery and Reinvestment Act of 2009, which was enacted last month.

Some provisions, such as the $8,000 tax credit for first-time homebuyers, have been widely publicized. But there are others that have received less attention that will have a positive impact on household budgets in the weeks and months ahead.

Here's a rundown on three such provisions:

Social Security payments: Beginning in May, Social Security recipients will begin to receive a one-time "economic recovery" payment of $250.

Those eligible to receive the payment include adults receiving Social Security benefits and Supplemental Security Income recipients. Beneficiaries of Medicaid staying in a care facility and children under 18 receiving Social Security benefits will not receive the $250 payment. Adults who were disabled as children will.

With married couples, both spouses will receive $250 payments if both are collecting Social Security benefits.

One-time $250 payments also will be sent to recipients of Veterans Affairs and Railroad Retirement Board benefits by those agencies. Anyone receiving benefits from more than one agency will receive just one $250 payment.

To receive the payment, recipients must have been eligible for Social Security, Supplemental Security Income, Veterans Affairs or Railroad Retirement Board benefits this past November, December or January. Anyone who has become eligible for these programs since February will not qualify.

For Social Security recipients, the $250 payments will be sent separately from the usual monthly payments. No action is required to receive the payment. Recipients should only contact the Social Security Administration if they have not received the payment by June 4, the agency says.

For more information on the $250 payments, visit www.socialsecurity.gov/payment/.

Tax Credit for Workers

In the next few weeks, many Americans should see a little bit extra in each paycheck.

The reason for that is a tax credit for workers included in the economic stimulus package. The Making Work Pay credit amounts to up to $400 for singles and up to $800 for married couples, based on a rate of 6.2 percent of earned income.

Most workers will see the impact of the credit in their take-home pay. Employers are to lower tax withholdings for eligible employees based on new tax withholding tables issued by the Internal Revenue Service. The new tables are supposed to be in use by April 1, meaning most workers do not need to take any action to benefit from the credit and should see the difference within the next few weeks.

They will need to report the credit on their 2009 tax return filed next year. Also, individuals and couples with more than one job may want to review their overall tax withholdings after the change to make sure they have sufficient tax withheld for the combined income.

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