By Congressman Michael Turner
Recently, Congress enacted the Economic Stimulus Act of 2008 which was passed by Congress to provide $150 billion in stimulus to the American economy. This legislation has been specifically targeted to provide assistance and an economic supplement to American families. The most talked about element of the stimulus package is the “recovery rebate” which will send a tax rebate check straight to American taxpayers. Because of a technicality, it seemed for a while as if Delphi workers might not be eligible for a recovery rebate. After being contacted by current and former Delphi workers, I have worked to obtain a clarification of the rebate process and how Delphi workers can participate.
The recovery rebate section of the economic stimulus package will send checks to over 130 million American taxpayers. Over 5.3 million Ohioans are currently expected to receive a check. After filing a tax return for 2008, a single person is eligible to receive a rebate check for up to $600 and a married couple can receive up to $1,200. There is also an additional rebate of $300 for each child an eligible person has. In order to be eligible for the full checks, a single person must make between $3,000 and $75,000 of taxable income and a jointly filing couple must make less than $150,000. The rebate checks will be phased down for those who earn above the income thresholds by taking five cents off of the check for every dollar of income above the limit. The checks are currently scheduled to go out as soon as May of this year.
Delphi employees who are separating from the company may be offered lump sum buyout payments. My office was contacted by former Delphi Corporation employees who have accepted these buyouts and were worried that they might not be eligible to receive the tax rebates. Because this buyout comes as a lump sum, a person’s income is inflated the year they receive the buyout. This is true for non-Delphi employees that accept similar buyouts from their employers.
Unfortunately, this is not an accurate representation of the person’s financial status. Many of these employees had been considered “adversely affected workers” by Department of Labor Secretary Elaine Chao and were eligible to receive Trade Adjustment Assistance or Alternative Trade Adjustment Assistance benefits. Local families, who the government admitted needed help and recently lost their jobs, were exposed to the possibility of not receiving a rebate check at a time when they desperately need it.
I contacted the Chairman of the House Ways and Means Committee and the Chairman of the Senate Finance Committee and related the concerns of our Delphi employees. I also made contact with the Commissioner of the Internal Revenue Service to urge for clarification on this point. The response was good news. Employees who have received a buyout in 2007 will be able to claim the rebate as part of their 2008 income tax filing.
Additionally, those who receive the tax rebate in 2008, and accept a buyout in that year, will not be penalized on their 2008 tax returns if their income is over the qualifying limit at that time. If a tax rebate check is mailed to you in 2008, and a lump sum buyout inflates your income in 2008, you still get to keep the tax rebate check.
I have worked consistently throughout my career to improve our local economy and to provide assistance to displaced manufacturing workers. As Ohio moves through this turbulent economic period, I will continue to support legislation that benefits our community and our nation’s economy.
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