Who could benefit: Billions available for U.S. taxpayers

WASHINGTON (AP) — Sending a kid to college, purchasing a new car, buying a home or making the one you own more energy efficient. Those are a few of the ways Americans might cut their tax bills under the economic stimulus package Congress is crafting.

The biggest tax breaks target the working poor, especially those with children. Most workers would see about a $20-a-week increase in their take-home pay, starting around June, from a new tax credit.

The goal is to get people to spend money at a time when most are cutting back and saving more.

Here are some ways taxpayers could save money:

UThe centerpiece of the tax package provides credits of up to $500 for individuals and $1,000 for couples, in 2009 and 2010, hence the increase in take-home pay. Individuals making more than $75,000 and couples making more than $150,000 would receive reduced amounts. The Senate bill phases out the credit quicker for families with incomes of more than $150,000.

UParents with children in college — and some adult students — could get expanded tax credits of up to $2,500 to help cover tuition and related expenses in 2009 and 2010. Families making between $160,000 and $180,000 can get reduced credits. Those making more are ineligible.

UFirst-time home buyers could get a tax credit of up to $7,500 if they buy homes in the next few months. The credit refunds 10 percent of the purchase price, up to $7,500, to couples with incomes of less than $150,000. The Senate version would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit.

UExisting homeowners could get a tax credit of up to $1,500 by making their homes more energy-efficient in 2009 or 2010. Numerous projects would qualify, such as installing energy-efficient windows, doors, roofs, furnaces, water heaters and air conditioners, or adding insulation.

UPeople who buy new cars in 2009 can deduct the interest payments and sales taxes from their taxable income under the Senate bill. The House bill doesn’t have that tax break.

UThe Senate bill would spare about 24 million taxpayers from being hit with the Alternative Minimum Tax in 2009. On average, the change would save mainly upper middle-income families of four about $2,300.

UThe Earned Income Tax Credit would be expanded for poor families with three or more children who pay no income taxes. The maximum check they could receive from the government would rise $5,028 to $5,656.

UPoor families would have greater access to the $1,000 child tax credit. The Senate bill lowers the earnings threshold to qualify from $12,550 to $6,000. The House bill would eliminate the earnings threshold, saving families $18.3 billion.