Recovery Act Benefits Extended

The Worker, Homeownership and Business Assistance Act of 2009 extended or expanded three provisions of ARRA: Emergency unemployment compensation, first time homebuyer credit, and business tax credits.

In states with more than 8.5% unemployment, 20 weeks of benefits were added to unemployment compensation; 14% in other states. Here is the link to find your state's unemployment office.

The deadline for buying your first home and receiving the $8,000 tax deduction has been extended to April 30, 2010. A similar credit of up to $6,500 applies to current homeowners who meet specific rules and buy new residences by April 30, 2010.

Refunds on certain taxes paid in prior years by businesses with net losses in 2008 were expanded to include businesses with net losses in 2009.

Question: Can the Bank Take NSF Fees Out of My Stimulus Check?

Yes! Once that money hits your bank account, it is fair game. The bank can take out regular fees, NSF fees, or whatever they are charging your account.

I realize that this seems counter-intuitive, considering that ARRA funds retain their character as ARRA funds throughout their use, but even ARRA money has to stop somewhere. ARRA funds retain their character from prime recipient to sub-recipient to contractor to sub-contractor, but they lose their federal status when they actually hit someone's paycheck. Stimulus money sent to individuals is the same - once it hits an individual's pocket (account, mattress, whatever), it is no longer federal money.

ARRA Jobs Number is Still Questionable.

The last sentence of my post of October 30, 2009 was: "The bottom line is this: While ARRA may be a wonderful thing, no one should take any report of jobs created or retained because of the stimulus package to be anything more than a guess."

No less a person that Earl Devaney, Chairman of the Recovery Accountability and Transparency (RAT) Board, agrees. The New York Times quoted Mr. Devaney, in testimony before Congress, as saying “I have no doubt that there’s a lot of jobs being created. I think it could be above or below 640. I think missing reports might drive the job numbers up, and I think there’s enough inaccuracies in here to question if the 640 number might go down.”

640? Remember the Obama administrations' loud trumpeting of the creation (or saving) of 640,000 jobs with the stimulus package?

Missing reports? Duh. Even Mr. Devaney admits that up to ten percent (10%) of the required reports on jobs have still not been filed. The deadline was when? October 10? I guess 90% compliance is not so bad for more than a month past the reporting deadline. Think the IRS would be so kind to any of us who reported a month late on our taxes?

Back to the numbers for a moment, GAO (according to the Times)found "that 58,386 of the jobs were being claimed by recipients who had not reported spending any money; on the other hand, recipients who had received nearly $1 billion had claimed no jobs at all." They also believe that errors in undercounting may be offset by errors in overcounting. Sounds to me like creative accounting, much like what Enron did to show its profitability. But far be it from me to insinuate that anything connected with the federal government might be less than completely honest.

Question: Do the Davis-Bacon Standards Apply to Community Action Agencies (Weatherization Assistance) ?

This was addressed by a letter from the Wage and Hour Division dated June 1, 2009 (The link on the title to this post). The short answer is "yes."

Section 1606 of ARRA applies the Davis-Bacon Act to "all laborers and mechanics employed by contractors and subcontractors on projects funded [by ARRA]." While the Department of Labor has long held that governmental entities are not "contractors" or "subcontractors" when the work is performed by the governmental entities' own employees, not-for-profit Community Action Agencies are under contract with those governmental entities for the weatherization program, not a part of the entities themselves.

Therefore, these Community Action Agencies - and contractors used by them - that are making repairs and improvements under the ARRA-funded weatherization assistance program are contractors, and thus are subject to the Davis-Bacon requirements.

Remember that some activities, such as energy audits and inspections, are not construction, and the technicians performing that sort of work are not subject to Davis-Bacon.

Tennessee's ARRA Audit Efforts

This article, hosted on the AGA (Association of Government Accountants) Weblog, is by Kathy Anderson, CGFM, assistant director for communication and coordination for the Division of State Audit, Comptroller of the Treasury, State of Tennessee.

It's a good quick read about what one state is doing to provide oversight.

Veterans Day

Today we honor all the men and women who have seved our country in the armed forces. Preservation of our freedoms is a noble cause, and I would like to extend a heart-felt thank you to all our vets. Included in that group are my brother-in-law, Chad Johnson, father (deceased), W.A. "Tex" Johnson, and father-in-law (deceased), Gilbert Metz.

Freedom is not free, and we need to all remember that freedom comes with responsibilities. We who have not fought for our freedom need to honor our vets, but also uphold that responsibility to allow others the freedoms we enjoy.

Finally, our hearts all go out to the victims and their families from Fort Hood. Our men and women in uniform are not the only ones who pay the price, because they have families and other loved ones who either deal with their loved one's wounds or loss, neither of which is easy. So thank you to the families of our service men and women, because you also are making a sacrifice.

ARRA: What recovery money is earmarked for water?

I posted an article today on Helium.com that describes the $6,000,000,000 worth of ARRA funds that have been earmarked for the EPA's water projects. Click the title to this post and check it out over there if you like.

Better Late Than Never!

Recovery.gov has a lot of interesting information posted. One tidbit concerns the amount of reporting that has been done, and how much of it was late.

As you are probably aware, the original deadline for Section 1512 reporting was October 10. The feds said that was the absolute deadline, with no exceptions except for federally-declared disasters. No extensions, no exceptions. Then the deadline was extended to the 20th, probably so that the systems involved would not crash (We had an office pool on when Recovery.gov would crash. I picked October 9.), or because someone in a position of authority realized that most reporting entities would not be ready.

So here are some numbers on reports submitted by recipients for the 1st quarterly reporting period:

All Contracts - 13,080 reports, $2,446,306,574 in total fed ARRA $ rec'd
All Grants - 142,825 reports, $34,177,542,918 in total fed ARRA $ rec'd
All Loans - 710 reports, $64,810,668.15 in total fed ARRA $ rec'd

These were listed as late - the reports were submitted after the 10th:

Late Contracts - 3948 (30%), $648,075,223.80 (26%)
Late Grants - 12,817 (9%), $3,536,965,543 (10%)
Late Loans - 238 (34%), $20,115,410.69 (31%)

While the percentages of late reports seem a bit high, training by the feds has been sorely lacking. This task has been left up to the states, some of which have worked hard and effectively to disseminate the information and provide assistance. Some may not have been as effective.

Keep in mind that these figures reflect reports filed. The biggest question in my mind is, "How much has not even been reported at all?"

IRS Information for Individuals

ARRA: It's not just for government anymore!

Actually, some of the ARRA provisions are designed to assist individuals, rather than governments and vendors. Part B programs include a variety of tax benefits that are available for individual taxpayers. The IRS has an online information center called The American Recovery and Reinvestment Act of 2009: Information Center that provides quite a bit of information, but here is a quick and dirty look at some of them (Some of which is quoted from the IRS web site):

The Making Work Pay Tax Credit means more take-home pay for many Americans. They have a withholding calculator on this site to help ensure enough is withheld from your check.

First-time homebuyers who purchase in 2009 AND close by November 30 can get a credit of up to $8,000 with no payback requirement under the First-Time Homebuyer Credit.

Taxpayers who buy certain new vehicles in 2009 (February 17 - December 31) can deduct the state and local sales taxes they paid or other taxes and fees (in states without sales tax - must be nice ;-)). Used cars do NOT qualify for this deduction.

The American Opportunity Credit expands the Hope credit program to help families and students find ways to pay higher education expenses.

Enhanced earned income tax credit and the additional child tax credit for 2009 & 2010.

Individuals may receive up to $2,400 in unemployment benefits tax free in 2009.

Social Security recipients, veterans and railroad retirees receive(d) an extra $250 in 2009. This is because of no cost of living adjustment (COLA) in 2009 - which happened because of no inflation, thus no cost of living increase.

Energy efficiency and renewable energy incentives.

The Health Coverage Tax Credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.

There's more, so check out the IRS site if you think you might be eligible.

Question: What can I buy with ARRA money?

ARRA does not specify specific items of cost that are not allowed. Other rules or laws do, such as Circular A-87’s prohibitions against such things as purchasing alcoholic beverages or paying the expenses of fund raising activities. ARRA funds may not be spent on certain projects, which are zoos, casinos, aquariums, and swimming pools, or related projects such as buildings to house these projects or roads leading to zoos, casinos, etc.