“But there are no payments to individual taxpayers this time,” he added.
Sablan, who will be on island until Saturday, said unlike the stimulus law last year, Obama’s provides tax credit only.
A media release from his office stated that nonresident aliens will not qualify for the credit.
Under the stimulus package, CNMI taxpayers will receive a tax credit of up to $400 for individuals and $800 for couples.
The U.S. Treasury will pay the commonwealth government an amount equal to the total cost of the credits claimed in the Northern Marianas.
The credit is refundable. So taxpayers who owe less tax than the amount of the credit will still receive the credit.
According to Sablan, “Refundability means that if you owe $300 in taxes and are eligible for a $400 credit, you will not have to pay the $300 in taxes, plus you will get a check for the extra $100.”
Instead of waiting to claim the credit when they file their 2009 tax returns, taxpayers may instead adjust the amount of money being withheld from their paychecks. That way they begin to receive the benefit of the tax cut immediately, rather than next year.
The tax credit phases out for single taxpayers with incomes over $75,000 and for couples whose combined incomes are greater than $150,000.
Sablan said the American Recovery and Reinvestment Act, or H.R. 1, is designed to directly benefit local governments in different states and American territories like Guam and the Northern Marianas in terms of better infrastructure, more funds for food stamps, Medicaid and other economic and social programs.
The Obama stimulus package provides a one-time cash payment of $250 to adults receiving Social Security benefits or veteran’s compensation or pension benefits, and to disabled persons receiving Supplemental Security Income. These economic recovery payments are expected to arrive by mid-June.
An estimated $20 billion will also be made available for the food stamp program which benefits low-income families.
Additionally, $2.8 billion will be provided to U.S. rural areas to expand broadband Internet service while $4 billion will go to programs that will develop rural communities like the Northern Marianas.
Sablan said the CNMI will get up to $96 million in new federal funds from Obama’s stimulus plan.
He said the money should help students in the CNMI and fund new road, water and sewer system projects.
But the money will not be handed out to the commonwealth.
Sablan said the CNMI government must apply for these funds.
“This money is meant to stimulate immediate economic activity, so the stimulus package has ‘use it or lose it’ provisions,” he said.
The territories will have to compete for a pool of $219.2 million funds under the stimulus package.
