Major Aid for Parents with Kids in College, Subway, Rail and Bus Commuters, Help for Small Business and Many Others
President Obama to Sign Stimulus Package in to Law Today
Officials Will Also Release Detailed Report on Economic Boost For NYC
U.S. Senator Charles E. Schumer and Representative Anthony Weiner today discussed several smaller, not widely noticed, provisions in the economic stimulus package that could end up saving middle class New Yorkers hundreds of dollars every year. Schumer and Weiner will list the top five tax-breaks and other provisions that both officials fought to have as part of the final package, including a $2,500 tax credit on college tuition costs, a doubling of the federal mass transit benefit, and eliminating onerous fees and red tape on government small business loans. The officials also released a new report on the overall economic benefit of the package on the New York City economy but will highlight some of the smaller provisions that will help create jobs and give families much needed financial relief.
“This is a huge package that will be a big help for New York’s economy, but there are also several smaller provisions that will pack a real punch for New York families,” Schumer said. “These smaller tax breaks and benefits will give middle class New York families some much needed relief during these difficult times and, taken together, can save those families thousands of dollars over the next two years. We need to use every tool the federal government has to get these economy going again and this economic stimulus package, from the top to the bottom, does just that.”
“This one package is going to do more to help New York's middle class than any in recent memory. It cuts taxes on our families and it eases the burden on our small businesses. The Big Apple is going to get a major economic boost just when it needs it,” Weiner said.
Tax Break for Middle Class Parents Struggling to Pay High Price of College Tuition
The final economic recovery bill includes a version of Senator Schumer’s new tax credit for families paying college tuition. Senator Schumer was the leading advocate for adding this provision to the package. The new credit of $2,500 is up to 40 percent refundable, making it a significant improvement over the current HOPE credit, which has a maximum benefit of $1,800 and is non-refundable, and greatly increasing the benefit for those families that currently take the deduction for college tuition (which maxes out at a benefit of $600 or $1,000, depending on a family’s tax bracket).
In 2007, more than 550,000 New York families claimed either the HOPE credit or the college tuition deduction. The new tax credit should benefit hundreds of thousands of additional families due to three factors: (1) the benefit can be used for more than one student in the household; (2) the new credit is partially refundable, meaning that the millions of New York families with incomes too low to owe federal income taxes can still claim a partial benefit; and (3) the income limits are slightly higher than in current law, reaching zero at $75,000 for singles and $150,000 for married. In order to be eligible for the new credit, students must be enrolled at least half-time. In the 2008-2008 academic year, there were 826,000 full-time students enrolled in institutions of higher education in New York State, as well as 339,000 part-time students.
Tax Break for Subway, Rail, and Bus Commuters
The final legislation includes a proposal to bring parity to tax-free commuting benefits offered by employers. Until now, employers could offer their workers a tax-free mass-transit benefit of $120 a month, but the maximum benefit for monthly parking costs was $230. The economic recovery act brings the transit benefit up to $230 a month, the same as the parking benefits.
According to the TransitCenter, this legislation will help the 15,000 employers and 650,000 employees in the NYC metro area who utilize the transit benefit save money. Under the provisions of this legislation, employees can save up to $1,000 a year, which is an additional $440 a year over current law if their transit commute exceeds the current monthly cap of $120/month. In total, this provision is expected to save commuters in NYC an additional estimated $37.5 million a year.
Makes It Easier for Small Businesses to Secure Gov’t Loans
The stimulus bill appropriates $730 million to improve existing SBA programs and create new initiatives that will address the current economic crisis. As a result of the financial crisis and the recession, small business lending in the SBA’s flagship loan programs – 7(a) and 504 programs – is in a freefall. The bill allocates $375 million to allow for temporary waivers or reductions in the fees the SBA charges to lenders and borrowers in the 7(a) and 504 loan programs. When determining the amount and structure of the waivers/reductions, the bill requires the SBA to give borrowers and smaller banks priority in receiving fee relief.
Tax Incentives for Small Businesses
*NYC has more than 200,000 companies qualify as small businesses, accounting for 2/3 of the city’s private sector jobs. (Of these, 96% have fewer than 50 employees).
*Temporarily increases the amount that small businesses can write-off for capital expenditures (i.e. to acquire or upgrade equipment, property, or industrial buildings) to $250,000, up from $125,000.
*5-year carryback of net operating losses for small business, up from 2 years. A net operating loss occurs when tax-deductible expenses exceed taxable revenues for a taxable year.
*$730 million to improve existing and create new Small Business Administration (SBA) loan programs.
*$375 million to allow for temporary waivers or reductions in the fees the SBA charges to lenders and borrowers in the existing loan programs.
Funding to Repair Elevators at NYC Public Housing Complexes
Schumer brokered an agreement with Congressional leaders and the Department of Housing and Urban Development that will ensure the New York City Housing Authority (NYCHA) can use the capital money it is expected to receive from the economic stimulus package to cover the high cost of elevator repairs and upgrades at its public housing complexes. Schumer said the money will go a long way to upgrading antiquated elevator equipment at affordable housing complexes across New York City. Overall, New York City could receive as much as $600 million in federal housing money as part of the final package.
Tax Break for Seniors
The final stimulus includes $250 tax credit to 406,375 New York City SSI Recipients. SSI is designed to help aged, blind, and disabled New Yorkers who have little or no income to provide cash to meet basic needs for food, clothing, and shelter.
New Tax Break on Car Purchases
New Yorkers who buy new cars, light trucks, recreational vehicles and motorcycles will now be able to deduct the state sales and excise taxes from the purchase on their federal returns next year.