Feb. 14 (Bloomberg) -- The costliest item in the economic stimulus plan passed by Congress is a tax credit of up to $400 for individuals earning less than $75,000 year.

Married couples earning less than $150,000 could claim a benefit of up to $800 under the provision, which has a price tag of $116 billion over 10 years, according to the congressional Joint Committee on Taxation.

The Senate approved the $787 billion stimulus plan 60 to 38 last night. Hours earlier, the House passed the plan 246 to 183. The package goes to President Barack Obama for his signature, providing the first major legislative victory of his administration.

The plan includes $212 billion in tax cuts and $575 billion in spending that Obama says will create or save 3.5 million jobs.

Infrastructure construction makes up a large part of the bill’s spending provisions, including $29 billion for highways, $17.7 billion for mass transit and rail and $18.8 billion for clean water and flood control projects.

The plan provides $87 billion for Medicaid, the health insurance program for the poor. It contains $39 billion for unemployed workers in families, including provisions extending jobless benefits for 20 additional weeks in most states and 33 additional weeks in states with high unemployment rates. It also increases weekly benefits by $25.

The bill spends $25 billion to provide subsidies to help jobless workers keep their health benefits by paying 65 percent of their premiums for nine months for married couples who earn less than $250,000.

Senior Citizens

The bill authorizes a one-time $250 payment for senior citizens, disabled veterans and disabled people living on Social Security benefits.

The measure’s tax-related portions include a $70 billion reduction in the alternative-minimum tax this year that would spare more than 24 million households from paying the levy. The provision would waive the AMT on so-called private-activity bonds, a type of municipal bond used to fund airport runways, housing projects, sewage-treatment plants and other facilities that benefit the public but aren’t explicitly city-run endeavors.

The bill allows businesses to write off the cost of equipment purchases more quickly. Another provision eases tax burdens on companies that restructure debt without entering bankruptcy.

The legislation repeals a tax rule issued by the Internal Revenue Service last September that made banks’ losses more valuable as tax deductions for those banks acquiring other financial institutions.

Earned Income Tax Credit

The earned income tax credit, a benefit for the working poor, would be expanded. And families who don’t earn enough to pay income tax would be eligible to claim the $1,000 child credit.

For homebuyers, the bill increases the value of a tax credit enacted last year by $500, to $8,000, and waives a requirement that the break be repaid over a 15-year period. The credit would still be limited to couples with income of less than $150,000 and to first-time buyers.

Buyers of new cars will be able to deduct the sales tax on the purchase, regardless of whether they itemize deductions.

The legislation consolidates tax incentives for higher education into a $2,500 credit that could be claimed by most working families. And it makes college-related book and computer purchases eligible for the write-off for the first time.

Other tax breaks for individuals include a waiver of taxes on the first $2,400 of unemployment benefits.

Wage Tax Credit

For businesses, the bill provides a 40 percent tax credit for the first $6,000 of wages paid to military veterans and “disconnected” youths, those who haven’t had regular employment or attended school in the past six months.

It also allows owners of small businesses to exclude 75 percent of profits from capital gains taxes, provided they owned the company for at least five years.

Among other spending measures, state and local governments will get $53.6 billion to prevent cuts in education services and for school renovations. The measure allocates $15.6 billion to increase higher education Pell grants by up to $500.

Other spending includes $19 billion for health-care technology programs, $20 billion to increase food stamp benefits, $4 billion for state and local law enforcement agencies and $4 billion to help train unemployed workers.

Financial companies that get money from the Federal Reserve and government rescue funds will face stricter rules for hiring foreign workers under the H-1B visa program. The visas are sought by U.S. businesses for highly trained overseas workers.

The provision requires companies that want to apply for a visa on behalf of a foreign worker not to dismiss employees in similar positions 90 days before and 90 days after requesting the visa. The companies also will have to prove they attempted to recruit a U.S. worker before requesting the visa.

The plan retains “Buy American” provisions for material used in construction projects it funds, though such rules cannot be implemented in a way that violates international trade agreements.

To contact the reporters on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net; Brian Faler in Washington at bfaler@bloomberg.net

Last Updated: February 14, 2009 00:00 EST