The American Recovery and Reinvestment Act was signed into law on February 17, 2009. Although many of the components may or may not directly affect many of us, there is one component that likely will.

Tax Relief

An expected $288 billion out of the total $787 billion package is reserved for tax relief. This is primarily geared for single taxpayers earning less than $75,000 a year, or $150,000 a year in the case of joint filers.

Will You Get a Stimulus Check?

You will not receive a stimulus check in 2009 (barring any additional legislation) like you did before. Instead, this will be a reduction in what would normally be deducted from your regular paycheck.

Single taxpayers (earning under $75,000) will receive a $400 credit that will be reflected when you file your taxes in early 2010. This will show up as extra money in each paycheck:

• Weekly: Extra $7.69
• Bi-weekly paycheck: Extra $15.38
• Semi-monthly: Extra $16.67
• Monthly: $33.33

Joint taxpayers will receive an $800 tax credit. This results in additional net pay of:

• Weekly: Extra $15.38
• Bi-weekly paycheck: Extra $30.76
• Semi-monthly: Extra $33.33
• Monthly: $66.67

When Will Paychecks Increase?

According to the Internal Revenue Service, the “Making Work Pay” tax credit will begin April 1, 2009 and run through December 31, 2010. Increases in net pay will actually be higher in 2009 since the amounts are prorated for a 12 month period.

These amounts reflect a reduction in what your employer withholds from your paycheck so your net pay will be larger. If you receive SSI payments, you can expect a payment of $250 in May (See SocialSecurityOnline for details). For more information on how the economic stimulus might affect you, visit Recovery.gov. This government site will answer some questions about the stimulus as well as to explain how this Act is expected to help revive the economy. In other words, it shows where the money goes.