Economic stimulus Act of 2008 - wikipedia Economic stimulus Act of 2008 The Economic Stimulus Act of 2008 ( Pub. L. 110 -- 185, 122 Stat. 613, enacted February 13, 2008 ) was an Act of Congress providing for several kinds of economic stimuli intended to boost the United States economy in 2008 and to avert a recession, or ameliorate economic conditions. The stimulus package was passed by the U.S. House of Representatives on January 29, 2008, and in a slightly different version by the U.S. Senate on February 7, 2008. The Senate version was then approved in the House the same day. It was signed into law on February 13, 2008 by President Bush with the support of both Democratic and Republican lawmakers. The law provides for tax rebates to low - and middle - income U.S. taxpayers, tax incentives to stimulate business investment, and an increase in the limits imposed on mortgages eligible for purchase by government - sponsored enterprises ( e.g., Fannie Mae and Freddie Mac ). The total cost of this bill was projected at $152 billion for 2008. Contents 1 Tax rebates 2 Rationale 3 Impact 4 Immigration restrictions 5 References 6 External links Tax rebates Tax rebates created by the law were paid to individual U.S. taxpayers during 2008. Most taxpayers below the income limit received a rebate of at least $300 per person ( $600 for married couples filing jointly ). Eligible taxpayers received, along with their individual payment, $300 per dependent child under the age of 17. The payment was equal to the payer 's net income tax liability, but could not exceed $600 ( for a single person ) or $1200 ( married couple filing jointly ). Net liability can be found in these locations : Form 1040 : line 57 plus line 52 Form 1040A : line 35 plus line 32 Form 1040EZ : line 10 Those with no net tax liability were still eligible to receive a rebate, provided they met minimum qualifying income of $3,000 per year. Rebates were phased out for taxpayers with adjusted gross incomes greater than $75,000 ( $150,000 for couples filing jointly ) in 2007. For taxpayers with incomes greater than $75,000, rebates were reduced at a rate of 5 % of the income above this limit. Individuals who were claimed as dependents by another taxpayer were not eligible for the rebates. The $3,000 of qualifying income included earned income ( e.g., wages, self - employment income, Social Security ), however Supplemental Security Income did not count as qualifying income for the stimulus payment. Also, low - income workers were required to file a return to receive the payment, even if they would not be required to file for income tax purposes. Some taxpayers who exceeded the income limits, but had qualifying children, still received a rebate. For example, a single parent whose 2007 adjusted gross income was $90,000, paid more than $600 in 2007 taxes and had two qualifying children received a rebate of $450. The IRS added together a $600 rebate for the parent and $600 for the two children to get $1,200, then subtracted the phaseout reduction of $750 ( $50 for each $1,000 income above $75,000 ) to get $450. According to the IRS, the stimulus payment did not reduce taxpayers ' 2008 refunds or increase the amount owed when filing 2008 returns. The payment schedule was based on whether the taxpayer 's 2007 tax return listed direct deposit information as well as the last two digits of the social security number of the tax return 's main filer, with direct deposits being sent between May 2 and May 16, and paper checks being sent between May 16 and July 11. On April 25, 2008, President Bush announced that the rebates would start going out on April 28, 2008 and the paper checks would be sent out starting on March 28, earlier than previously announced by the IRS. Taxpayers who used direct deposit for their refunds received the stimulus payment that same way, provided they had not : Taken out a refund anticipation loan or `` rapid refund '' ; Used a service such as TurboTax and had the transmission fees taken out of the refund amount ; Had their refund deposited across two accounts ; Allowed their tax preparer ( such as a CPA ) to deduct their fee from the refund amount. If any of these scenarios applied, the payment was sent as a paper check through U.S. mail. Rationale As 2008 began, economic indicators suggested an increased risk of recession. Federal Reserve Chairman Ben Bernanke testified before Congress that quick action was needed to stimulate the economy through targeted government spending and tax incentives. Congress moved rapidly to pass such legislation. The legislation was designed to stimulate spending by businesses and consumers during 2008. The hope was that the targeted individual tax rebates would boost consumer spending and that targeted tax incentives would boost business spending. Lawmakers raised the limits on conforming mortgages eligible for government insurance and GSE purchase in response to the subprime mortgage crisis. This crisis had resulted in a widespread credit crunch by late 2007. The credit crunch led to a reluctance by lenders to issue so - called jumbo mortgages for the purchase of houses that exceeded the FHA and GSE limits. The United States housing bubble had pushed house prices above those limits in many areas of the country. As interest rates rose for jumbo mortgages, fewer buyers could afford them, and house prices were being forced down toward the limits for conforming mortgages. By raising those limits, lawmakers hoped to slow or halt the decline in house prices, which threatened the financial well - being of homeowners, banks and other financial entities holding jumbo mortgages. The FHA loan limits also went up with the stimulus package on March 6. The loan limit package is called `` FHA Forward. '' Impact One study compared the spending patterns of households that received their stimulus payments early on with the spending of patterns of households who had not yet received their payments. The researchers found that the stimulus checks increased spending for the typical family by 3.5 % when the rebate arrived, boosting overall nondurable consumption by 2.4 % in the second quarter of 2008. The study concludes that the rebate payments for U.S. households were an effective stimulus method by increasing disposable income despite the predictions of certain economic theories such as the permanent income hypothesis. One study investigated hospital visits in the 23 weeks following the stimulus payments and found the payments raised the probability of an adult emergency department visit by an average of 1.1 percent. The study authors suggest that need for care may have been increased by additional spending on alcohol and narcotics. Immigration restrictions Taxpayers who filed their returns jointly were not eligible for payment if any of the persons on the tax return filed with an Individual Taxpayer Identification Number ( ITIN ) instead of a social security number. For example, if a family of five had one parent with an ITIN, no money is payable to any member of the family, including US citizens with valid social security numbers. The rule was added after the Federation for American Immigration Reform ( FAIR ) lobbied the Senate for the change. The amendment was proposed by Senator John Ensign of Nevada. As a result, many legal resident aliens and overseas military families did not receive any payment. US citizens who did not receive payments included those who filed a joint tax return for 2007 and included an individual taxpayer identification number, or ITIN, on the document. In this case the entire family was ineligible for the economic stimulus rebate President Bush announced in 2008. At least one million legal residents and tens of thousands of troops were affected by the law, which was designed to keep illegal immigrants from getting stimulus checks. References Jump up ^ `` House Follows Senate in Approving Economic Stimulus Plan ''. FoxNews.com. February 7, 2008. Retrieved February 14, 2008. Jump up ^ `` Budget Report : H.R. 5140 : Economic Stimulus Act of 2008 ''. 2008 - 02 - 11. Retrieved 2008 - 07 - 22. ^ Jump up to : `` H.R. 5140 : Economic Stimulus Act of 2008 ''. 2008 - 01 - 28. Retrieved 2008 - 05 - 14. ^ Jump up to : `` Economic Stimulus Payment FAQs : Basic Eligibility ''. IRS. 2008 - 05 - 12. Retrieved 2008 - 05 - 14. Jump up ^ See http://usgovinfo.about.com/od/incometaxandtheirs/a/irsonrebate.htm ; accessed on Feb. 18, 2008. Jump up ^ http://turbotax.intuit.com/support/kb/tax-content/tax-tips/5462.html accessed Feb. 26. Jump up ^ https://www.irs.gov/newsroom/article/0,,id=179211,00.html ; accessed May 4. Jump up ^ https://www.irs.gov/irs/article/0,,id=180250,00.html accessed Mar. 19, 2008 Jump up ^ https://news.yahoo.com/s/ap/20080426/ap_on_go_pr_wh/bush_economy accessed April 26, 2008 Jump up ^ Kopecki, Dawn ( 2008 - 01 - 17 ). `` Bernanke Backs Calls for Quick Action ''. BusinessWeek. Retrieved February 14, 2008. Jump up ^ `` FHA Mortgage Limits ''. Retrieved 2008 - 05 - 14. ^ Jump up to : Broda, Christian. `` The impact of the 2008 rebate ''. Economic Stimulus Act of 2008. Retrieved 20 March 2012. Jump up ^ Gross, Tal ; Jeremy Tobacman ( Spring 2014 ). `` Dangerous Liquidity and the Demand for Health Care ''. J. Human Resources. 49 ( 2 ). Retrieved 12 May 2014. Jump up ^ Weaver, Teri ; John Vandiver ( 2008 - 03 - 29 ). `` ITIN Ineligible for Special Rebate ''. Military.Com. Retrieved 2008 - 05 - 14. Jump up ^ FAIR : American Public Rejects Tax Rebates for Illegal Aliens Jump up ^ YouTube - Stimulus Package Includes Illegals Jump up ^ Weaver, Teri ; John Vandiver. `` Joint tax returns using ITIN ineligible for special rebate ''. Retrieved 2008 - 05 - 14. Jump up ^ McLaughlin, Ken ( 2008 - 05 - 08 ). `` For some U.S. troops, economic stimulus check is not in mail REBATE BYPASSES THOSE WITH FOREIGN SPOUSES ''. San Jose Mercury News. Retrieved May 8, 2008. External links The text of the act Stimulus Payments : Answers to Frequently Asked Questions Unclaimed Economic Stimulus Payments, `` GovGab '', U.S. government blog, August 4, 2008 Tax Acts of the United States Internal Revenue 1861 1862 1864 1913 1916 1917 1918 1921 1924 1926 1928 1932 1934 1935 1936 1940 1940 ( 2nd ) 1941 1942 1943 1943 1944 1945 1948 1950 1950 1951 1954 1954 Code 1962 1964 1968 1969 1971 1976 1977 1978 1981 1982 Gas Tax 1984 COBRA 1986 1986 Code 2008 Crisis 2012 Tariffs 1789 : Hamilton I 1790 : Hamilton II 1792 : Hamilton III 1816 : Dallas 1824 : Sectional 1828 : `` Abominations '' 1832 1833 : Compromise 1842 : Black 1846 : Walker 1857 1861 : Morrill 1872 1875 1883 : Mongrel 1890 : McKinley 1894 : Wilson -- Gorman 1897 : Dingley 1909 : Payne -- Aldrich 1913 : Underwood 1921 : Emergency 1922 : Fordney -- McCumber 1930 : Smoot -- Hawley 1934 : Reciprocal 1948 : GATT 1962 1974 / 75 1979 1984 1988 : Canada FT 1993 : NAFTA 1994 : WTO 2002 : Steel U.S. subprime mortgage crisis Background / timeline Background information Impact timeline Causes United States housing bubble / housing market correction Role of credit rating agencies Government policies Impacts Financial crisis of 2007 -- 08 Great Recession Writedowns Indirect economic effects Responses Economic Stimulus Act of 2008 Housing and Economic Recovery Act of 2008 Emergency Economic Stabilization Act of 2008 Dodd -- Frank Wall Street Reform and Consumer Protection Act Acquired or bankrupt banks in the late 2000s financial crisis Capital Assistance Program Capital Purchase Program Federal Reserve responses Federal takeover of Fannie Mae and Freddie Mac Government intervention Homeowners Affordability and Stability Plan Hope Now Alliance Loan modification Public -- Private Investment Program for Legacy Assets Regulatory responses Primary Dealer Credit Facility 2009 Supervisory Capital Assessment Program Tea Party protests Term Asset - Backed Securities Loan Facility Troubled Asset Relief Program Wall Street reform Related topics Error accounts Financial position of the United States Foreclosure rescue scheme Property derivatives Great Recession By region Africa Americas United States South America Asia Europe Oceania United States - specific Automotive industry crisis California budget crisis Housing bubble Housing market correction Subprime mortgage crisis Banking losses and fraud Anglo Irish Bank hidden loans controversy Libor scandal Tom Hayes Société Générale trading loss Forex scandal Seán FitzPatrick Bernard Madoff Tom Petters Scott W. Rothstein Allen Stanford Government entities Consumer Financial Protection Bureau Federal Deposit Insurance Corporation Federal Home Loan Banks Federal Housing Administration Federal Housing Finance Agency Federal Housing Finance Board Federal Reserve System Government National Mortgage Association Irish Bank Resolution Corporation National Asset Management Agency Office of Federal Housing Enterprise Oversight Office of Financial Stability UK Financial Investments Government policy and spending responses Banking and finance stability and reform Anglo Irish Bank Corporation Act 2009 Banking ( Special Provisions ) Act 2008 China -- Japan -- South Korea trilateral summit Commercial Paper Funding Facility Dodd -- Frank Wall Street Reform and Consumer Protection Act Emergency Economic Stabilization Act of 2008 Irish emergency budget, 2009 Irish budget, 2010 Irish budget, 2011 Irish budget, 2012 Irish budget, 2013 Temporary Liquidity Guarantee Program Term Asset - Backed Securities Loan Facility Troubled Asset Relief Program 2008 United Kingdom bank rescue package Bank stress tests EU U.S. Stimulus and recovery 2008 European Union stimulus plan 2008 -- 09 Keynesian resurgence American Recovery and Reinvestment Act of 2009 Chinese economic stimulus program Economic Stimulus Act of 2008 Fraud Enforcement and Recovery Act of 2009 Green New Deal Housing and Economic Recovery Act of 2008 National fiscal policy response to the Great Recession Zero interest - rate policy Government interventions, rescues, and acquisitions List of banks acquired or bankrupted during the Great Recession Non-banking Chrysler General Motors Securities involved and financial markets Auction rate securities Collateralized debt obligations Collateralized mortgage obligations Credit default swaps Mortgage - backed securities Secondary mortgage market Social responses Tea Party protests ( United States ; c. 2009 ) May Day protests ( Europe, Middle East and North Africa, Asia ; 2009 ) Occupy movement ( worldwide ) Related topics 2000s energy crisis Central Asia : 2008 Effects on museums Decline of newspapers World food price crisis European debt crisis Financial crisis of 2007 -- 08 List of countries by public debt Retrieved from `` https://en.wikipedia.org/w/index.php?title=Economic_Stimulus_Act_of_2008&oldid=794837734 '' Categories : United States economic policy Great Recession in the United States United States federal taxation legislation 2008 in economics 110th United States Congress Economic stimulus programs Talk Contents About Wikipedia Deutsch Edit links This page was last edited on 10 August 2017, at 09 : 47. 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Question: the stimulus package proposed by the bush administration in early 2008 relied upon
Answer: tax rebates