Biden plan would offer tax credits to homebuyers, not $400 a month to everyone | Fact check

Joedy McCreary, USA TODAY
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The claim: Post implies Biden plan would give all Americans $400 cash every month for two years

A March 9 Instagram post (direct link, archive link) shows an image of President Joe Biden smiling into the camera.

“President Biden wants to give Americans $400 a month for the next two years,” reads the text in the image.

Many comments on the post suggest users believe it means the plan would include cash payouts to everyone in the U.S., similar to the stimulus payments made during the pandemic.

“Didn’t trump start giving out money first?? (sic)” one wrote.

“400 a month per household member and not make us pay for it next year. Sure I’ll take it,” wrote another.

The post received more than 1,000 likes in three days.

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Our rating: Missing context

The implied claim is wrong. Biden has not advocated for direct payments of that amount or frequency to any subset of Americans. The post is vague, but if it's intending to reference a proposed tax credit for first-time homebuyers that Biden introduced during the State of the Union address, it mischaracterizes that program.

Biden proposal includes tax credit, not cash payout

In making his case for a second term, Biden pitched a wide range of policy ideas during his State of the Union address, covering issues from prescription drug prices to the housing crisis. Home affordability at the end of 2023 remained near its lowest level in more than a decade, according to the National Association of Home Builders.

But contrary to the claim in the Instagram post, none of his proposals involve the federal government paying any or all Americans $400 a month for two years.

The post doesn't clarify what proposal it's referring to, but the most charitable interpretation would be that it's an attempt to reference a plan to issue tax credits to first-time homebuyers.

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“I don’t see where else they could be getting the $400-per-month figure from,” Dorothy Brown, an expert on taxation at the Georgetown University Law Center, told USA TODAY in an email.

Under the proposal Biden introduced during the March 7 address and called on Congress to pass, first-time homebuyers would receive tax credits worth $5,000 a year for two years, according to an announcement from the White House. That's roughly equal to $400 a month for two years. A tax credit is not a direct cash payment but rather a dollar-for-dollar amount a taxpayer may claim to offset the amount of income tax that is owed, according to the Internal Revenue Service.

It is not clear if the credits would be refundable – meaning a taxpayer would receive a cash refund if the amount of the credit exceeds the amount of tax that person owes – said Nathan Goldman, an expert on taxation at North Carolina State University, in an email to USA TODAY. That was the case under a similar program enacted by President Barack Obama’s administration during the housing crisis of 2008 and 2009 that offered first-time homebuyers credits worth up to $8,000, Goldman said.

In addition to the mischaracterization of the proposed credits as cash payouts, the post wrongly implies that everyone would be entitled to one. The Biden Administration placed its estimate in terms of families, not individuals, and said it expects roughly 3.5 million "middle-class families" to receive the credits during the two-year span, according to the March 7 White House announcement.

“Not everybody will get a $10,000 tax credit,” Goldman said.

USA TODAY reached out to the social media user who shared the post but did not immediately receive a response.

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This article originally appeared on USA TODAY: Post misrepresents Biden tax credit plan as $400 payments | Fact check