Saturday, February 28, 2009

NEW 2009 TAX PROVISIONS

The American Recovery and Reinvestment Act of 2009 was signed into law on February 17, 2009, and contains the following provisions:

  • New economic recovery payments designed to give taxpayers cash benefits during 2009 to help stimulate the economy.
  • A new Making Work Pay tax credit designed to give working families up to $400 ($800 MFJ) when filing their 2009 tax return.
  • New withholding tables designed to increase an employee's take-home pay during 2009 as a result of the new Making Work Pay credit.
  • An increase in the Earned Income Credit for families with 3 or more qualifying children.
  • An increase in the refundable portion of the Child Tax Credit.
  • A new and improved Hope Scholarship Credit renamed the American Opportunity Education Tax Credit.
  • A new provision to allow students to treat the purchase of computers as qualified education expenses under Section 529 plans.
  • An extension of the First-Time Home Buyer Credit and the elimination of the recapture rules for homes that are held more than 3 years.
  • A new sales tax deduction for non-itemizers who purchase a vehicle.
  • A new exclusion for unemployment benefits received.
  • AMT relief for 26 million families.
  • An extension of the Special Depreciation Allowance.
  • An extension of the increased Section 179 deduction limits.
  • Net Operating Loss provisions affecting 2008 tax year NOLs.
  • The ability for certain businesses to spread cancellation of debt income over 10 years.
  • New targeted groups for the Work Opportunity Tax Credit.
  • New Section 1202 small business stock rules.
  • New safe harbor rules for estimated tax payments.
  • New S corporation built-in gains tax rules.
  • Extension and new provisions for the various energy tax credits.
  • New provision affecting transportation fringe benefits.
  • New COBRA continuation coverage rules.
  • and more…
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