President Obama, in support of Vice President Biden who is the chair of the White House Task Force on Middle Class Families, is encouraging the following income tax credits or deductions.
Student federal loan payment cap
Loan payments for students would be limited to 10% of their income above a basic living allowance. For example, if you borrowed $20,000, and you’re earning $30,000 annually, you would only have to pay $115 a month, instead of $228 from the usual 10-year term repayment plan.
Direct-deposit retirement plans
All employers would be required to have a direct-deposit option for employer-based retirement plans. These payments will be saved and then matched by the Saver’s Tax Credit if the worker’s family is qualified. Small firms will be exempt, under certain guidelines.
The Saver’s Tax Credit would be simplified and expanded. The first $1,000 will be matched with a 50% package for families earning $65,000 and below annually, and a partial credit can be given for those who earn up to $85,000.
Child and Dependent Care Tax Credit
Originally for middle class families making under $85,000 a month, the proposal is to increase the income limit to $115,000, and the 20% credit on qualified expenses be changed to 35%. Families will be able to claim up to $3,000 for one child ($6,000 for two). A $1.6-billion funding increase for childcare aims to help 235,000 more children.
Caregiver Initiative
A $102.5-million Caregiver Initiative will give a $52.5-million boost to the Department of Health and Human Services. These will be distributed to their caregiver support programs, including temporary respite care, training and critical services. About 200,000 additional caregivers can benefit from all this, and 3 million more hours of care can be given to the elderly.
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