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We been looking at Obama Tax credit in series of blogs (Taxpayer Tax credit, New Home buyer Tax credit and Energy Credit) adding my personal view on each of them and how we tax payers can take advantage of it. This is last part of the blog series which talks about unemployment insurance help and other credits.

Unemployement Benefits: Jobless get a little extra help

Many of those who are unemployed will get a boost from the stimulus bill,including a $25 increase in weekly benefit checks through 2009 that should help not only those who are out of work but the broad economy as that money gets spent.

Currently, the nationwide average weekly check to those receiving unemployment benefits is $295.05, ranging from $179.08 in Mississippi to $408.28 in Hawaii, according to the National Employment Law Project. Increasing payments is a good way to stimulate the economy, because, “You can get money into the hands of people right away” as per analyst.

And people who are unemployed are likely to spend it. More than 4.8 million people were collecting unemployment benefits at the end of January, up 78% from a year earlier and the highest since records began in 1967, the Labor Department said.

The bill includes other measures to help those who have lost their jobs. They are:

•Lengthen the period in which people can be eligible for extended unemployment benefits. The program, which provides up to 33 weeks of extra jobless benefits after workers exhaust the regular 26 weeks received in most states, was passed last year and was set to expire at the end of March. Under the stimulus bill, the extended benefits would be available through the end of 2009. The NELP estimates this will help about 3 million people.

•Provide money to states that agree to make benefits available to more workers. That would help at least 500,000 people, including some low-wage and part-time workers, who wouldn’t otherwise receive unemployment benefits, the NELP says.

•Suspend the taxation of unemployment benefits up to $2,400.

The measure also helps the unemployed and others by increasing the maximum monthly food-stamp benefit by 13%, which lawmakers estimate will help 31 million Americans, half of them children. And the bill provides a subsidy to cover 65% of a worker’s COBRA health insurance premiums for up to nine months. COBRA lets workers continue their former employer’s coverage for at least 18 months.

Vijai’s 2cents:

It is really a much needed help the unemployed. Unless you experienced the unemployment, it hard to understand how each dollar values. So I would give 100% kudo’s to Obama adminstration on this benefit. Adding on top of it, suspending the taxation upto $2,400 is a bonus. Every dollar adds value to these jobless folks.

Other tax provisions in the stimulus package:

•An expanded earned income tax credit and child tax credit for low-income families.

•A higher education tax credit. Parents of college students would be eligible to claim a tax credit of up to $2,500. The credit is more generous than the existing Hope Scholarship Tax Credit, which maxes out at $1,800 and is available only for the first two years of college, says Amy McAnarney, executive director of H&R Block’s Tax Institute. The tax credit, which would be available in 2009 and 2010, phases out for single taxpayers with AGI of $80,000 to $90,000 and married taxpayers with AGI of $160,000 to $180,000.

•A stopgap measure designed to prevent the alternative minimum tax from hitting more than 24 million households in 2009. The AMT was designed to prevent extremely wealthy taxpayers from using loopholes and deductions to avoid taxes. But because it was never indexed to inflation, it has expanded to encompass more upper-middle and some middle-class taxpayers. About 4 million owed the AMT last year.

These are just few other credits which many of can take advantage either in this year tax return by filing an extension and save for next year.

Here is a nice article from kiplinger on 7 misconception about tax credit.

I hope this series of blogs about obama’s tax credits with my detail insights on how you can make use of it were helpful. I will come back later with an interesting topic from my valise.

Some content source courtesy: usatoday.com