The stimulus package was passed by the U.S. House of Representatives on January 29, 2008, and in a slightly different version by the U.S. Senate on February 7, 2008.
The payment was equal to the payer's net income tax liability, but could not exceed $600 (for a single person) or $1200 (married couple filing jointly).
For example, a single parent whose 2007 adjusted gross income was $90,000, paid more than $600 in 2007 taxes and had two qualifying children received a rebate of $450.
[6] According to the IRS, the stimulus payment did not reduce taxpayers' 2008 refunds or increase the amount owed when filing 2008 returns.
Federal Reserve Chairman Ben Bernanke testified before Congress that quick action was needed to stimulate the economy through targeted government spending and tax incentives.
The credit crunch led to a reluctance by lenders to issue so-called jumbo mortgages for the purchase of houses that exceeded the FHA and GSE limits.
"[11] A December 2009 study found that only about one-third of the tax rebate was spent, providing only a modest amount of stimulus.
The researchers found that the stimulus checks increased spending for the typical family by 3.5% when the rebate arrived, boosting overall nondurable consumption by 2.4% in the second quarter of 2008.
[14] The rule was added after the Federation for American Immigration Reform (FAIR), an anti-immigration organization with ties to white nationalism,[15] lobbied the Senate for the change.
[18] At least one million legal residents and tens of thousands of troops were affected by the law, which was designed to keep illegal immigrants from getting stimulus checks.