The American Recovery and Reinvestment Act of 2009
|
| The American Recovery and Reinvestment Act of 2009 Information |
On June 8, 2009, the IRS released to Software Developers the implementation of The American Recovery and Reinvestment Act of 2009. Below we have listed this information for taxpayers.
Click on the option, we will display more information for you.
|
Making Work Pay Credit | Payments to Recipients of SS, SSI, RRB and Veterans | Special Credit for Certain Government Retirees | Earned Income Tax Credit | Child Tax Credit Increases | American Opportunity Tax Credit | Qualified Higher Education Expense (529 Accounts) | First Time Homebuyer Credit | Unemployment Compensation | Sales Tax Deduction for Certain Vehicle Purchases | Alternative Minimum Tax | Investment Credit in lieu of Production Credit | Credit for Renewable Energy Property | Non-Business Energy Property Credit | Residential Energy Efficient Property | Credit for Alternative Fuel Behicle Refueling Property | Carbon Dioxide used as a Tertiary Injectant | Qualified Plug-In Electric Drive Motor Vehicle Credit | Credit for Certain Plug-In Electric Vehicles | Conversion Kits | Alternative Motor Vehicle Credit as a Personal Credit | Special Allowance for Certain Property Acquired in 2009 | Expensing of Certain Depreciable Business Assets | Build America Bonds | Regulate Investment Companies Bond Credits | COBRA | | Making Work Pay Credit | Top |
- For Tax Years 2009 and 2010
- Credit of up to 6.2% of earned income/maximum $400 Individual; $800 Joint Filers
- Phase out AGI for credit is $75,000 (150,000 Joint Filers)
- Credit is reduced by amounts received as SSA/VA/RRB payments and Special Credit for Government Pensioners
- New Schedule M will be used for this credit
For more information on this credit, see the IRS Web Site.
| | Payment to Recipients of SS, SSI, RRB, and Veterans | Top | - The economic recovery payment is a one-time payment of $250 that will be made in 2009 to retirees, disabled individuals and Supplemental Security Income (SSI) recipients receiving benefits from the Social Security Administration, disabled veterans receiving benefits from the Department of Veterans Affairs and those receiving benefits from the Railroad Retirement Board.
- Checks will be certified and issued by Social Security, the Railroad Retirement Board, and Veterans Affairs.
- Reduces Making Work Pay Credit
- Identified on a new Schedule M
| | Special Credit for Certain Government Retirees | Top |
- For Tax Year 2009
- One-time $250 refundable tax credit claimed on 2009 tax return for certain government retirees who are not eligible for the Social Security benefits.
- Reduces Making Work Pay Credit
- Claimed on a new Schedule M
| | Earned Income Tax Credit | Top |
- For Tax Years 2009 and 2010
- Increases credit percentage to 45% for 3 or more qualifying children
- Revised Forms 1040 and 1040A Instructions, including EIC Table/Worksheet changes.
- Revision to Schedule EIC
Before 2009, EIC Tables and worksheets for 3 children utilized the calculation for EIC for 2 or more children. Beginning in 2009, the table will include calculations for 1 child, 2 children and 3 or more children.
| | Child Tax Credit Increases | Top |
- For Tax Years 2009 and 2010
- Reduces earnings threshold from $8,500 to $3,000 (taxpayers who earn $3,000 can now qualify to receive Child Tax Credit whereas in previous filing years, taxpayers must have income of at least $8,500 to qualify for the credit.)
- Revisions to Form 8812, Additional Child Tax Credit will be made.
| | American Opportunity Tax Credit | Top |
- For Tax Years 2009 and 2010
- Credit modifies the existing Hope Credit to increase maximum amount per student
- Receive $2,500 higher education credit (increased from $2,000)
- Allows 40% refundable credit
- Allowed for up to 4 years post secondary education (increased from 2 years)
- Revisions to Form 1040, 1040A, 1040EZ, 2210, 2210F, and 8863
| | Qualified Higher Education Expenses (529 accounts) | Top |
- For Tax Years 2009 and 2010
- Expands definition of qualified expenses for Section 529 accounts to include computer technology and equipment
- Revisions to Publication 970 and Form 1040EZ Instructions to be made.
| | First Time Homebuyer Credit | Top |
- For Tax Year 2009
- Expands refundable credit for new home purchases by first-time homebuyers - 10% of purchase price up to maximum of $8,000 credit
- Applied to primary residence purchases that close on or after January 1, 2009 through November 30, 2009
- No repayment if primary residence retained for 36 months
- Revisions to Forms 1040 and 5405 to be made
| | Unemployment Compensation | Top |
- For Tax Year 2009
- Temporarily suspends federal income tax on the first $2,400 of unemployment benefits.(First $2,400 of Unemployment is non taxable income.)
- Revisions to be made to Forms 1040, 1040A, 1040EZ, 1040NR, 1040C, 5074, and 8689.
| | Sales Tax Deduction for Certain Vehicle Purchases | Top |
- For Tax Year 2009
- Applies to purchase of new vehicles on or after February 17, 2009 through December 31, 2009
- Allows taxpayers to deduct the sales, local and excise tax paid on a new car up to the purchase price of $49,500
- Phase out with AGI of $125,000 ($250,000 joint filers)
- Revisions to Forms 1040, 1040A, 1040EZ, 6251, and Schedule A.
| | Alternative Minimum Tax | Top |
- For Tax Year 2009
- Extends AMT relief for nonrefundable personal credits
- Increases the AMT amount exemption to $46,700 for Individuals; $70,950 for joint filers
- Revisions to be made for Forms 1116, 5696, 6251, 8396, 8801, 8839, 8859, 8863, and 8880
| | Investment Credit in lieu of Production Credit | Top |
- For Tax Years 2009 and later years
- Businesses who place in service facilities that produce electricity from wind and some other renewable resources after December 31, 2008 can either:
* Elect the energy investment tax credit which generally provides a 30% tax credit for investments in energy projects, OR
* Elect the production tax credit which can provide a credit of up to 2.1 cents per kilowatt-hour for electricity produced from renewable resources - Revisions to Forms 3468 and 8835
| | Credit for Renewable Energy Property | Top |
- For Tax Year 2009 and later years
- Repeals limitations on:
* The $4,000 limit on the 30% energy tax credit for qualified small wind energy property; and,
* Property financed by subsidized energy financing - Applies to property placed in service after December 31, 2008
- Revisions to Forms 3468 and 5695
| | Non-Business Energy Property Credit | Top |
- For Tax Years 2009 and 2010
- Energy tax credit for energy efficient improvements made to existing homes
* Insulation
* Energy efficient exterior windows
* Energy efficient heating and air conditioning systems - Increase to credit rate
* 30% of the cost of all qualifying improvements
* $1,500 maximum credit limit - Revision to Form 5695
| | Residential Energy Efficient Property | Top |
- For Tax Year 2009 and later years
- Removes limitations on the tax credit for residential energy efficient property such as
* Solar hot water heaters
* Wind turbines
* Geothermal heat pumps - Allows 30% of cost of qualified property
- Revision to Form 5695
| | Credit for Alternative Fuel Vehicle Refueling Property | Top |
- For Tax Years 2009 and 2010
- Property placed in service in 2009 and 2010
- Qualified property (other than property related to hydrogen) increased to 50% credit with per location limit increase to $50,000 for business property ($2,000 for other/residential locations)
- Property related to hydrogen keeps the 30% rate with per-business location limit increase to $200,000
- Revision to Form 8911
| | Carbon Dioxide used as a Tertiary Injectant | Top |
- Applies to carbon dioxide captured after February 17, 2009
- Requires carbon dioxide used as a tertiary injectant and otherwise eligible for a $10 per metric ton credit be sequestered by the taxpayer in permanent geological storage in order to qualify for such credit.
- Permanent geological storage includes oil and gas reservoirs in addition to unminable coal seams and deep saline formations.
- Revision to Form 8933
| | Qualified Plug-In Electric Drive Motor Vehicle Credit | Top |
- Applies to new vehicle purchases after December 31, 2009
- Modifies the tax credit for qualified plug-in electric drive motor vehicles
* 4 or more wheels
* Gross vehicle weight rating less that 14,000 lbs
* Draw propulsion using battery with at least 4 kilowatt hours that can be recharged from an external source of electricity - Minimum amount $2,500; Maximum amount $7,500 (depending on battery capacity)
- Reduction in credit after 200,000 vehicles sold
- New Form 8936
| | Credit for Certain Plug-In Electric Vehicles | Top |
- Applies to purchases after February 17, 2009 and before January 1, 2012
- Certain low-speed electric vehicles
* Low speed vehicle propelled by electric motor that draws electricity from a battery with a capacity of 4 kilowatt hours or more, or
* Two or three wheeled vehicle propelled by electric motor that draws electricity from battery with capacity of 2.5 kilowatt hours - 10% of the cost of the vehicle up to maximum credit of $2,500
- Revisions to Forms 3800, 5695, 8396, 8834, 8859, 8910, 8936
| | Conversion Kits | Top |
- Tax credit for Plug-in electric drive conversion kit
- Applies to vehicles converted to qualified plug-in electric drive motor vehicle
* placed in service after February 17, 2009
* Does not apply to conversions after December 31, 2011 - 10% of the cost of the conversion kit, up to a maximum credit of $4,000
- Revision to Form 8910
| | Alternative Motor Vehicle Credit as a Personal Credit | Top |
- For Tax Year 2009
- Allows the Alternative Motor Vehicle Credit to be applied against the Alternative Minimum Tax
- Revisions to Forms 3800, 5695, 8396, 8859, 8910
| | Special allowance for certain property acquired in 2009 | Top |
- For Tax Year 2009 (2010 for certain longer-lived and transportation property)
- Extends the additional first-year depreciation deduction
- Permits corporations to increase the research credit or minimum tax credit
- Revision to Form 4835
| | Expensing of certain depreciable business assets | Top |
- For Tax Year 2009
- Extends the temporary benefit for capital expenditure amounts ($250,000 and $800,000)
- Revision to Form 4562
| | Build America Bonds | Top |
- For Tax Years 2009 and 2010
- Authorizes state and local governments to issue two general types of Build America Bonds as taxable governmental bonds with Federal subsidies for a portion of their borrowing costs
- Subsidies tax form of either:
* Tax credits provided to holders of the bonds, or
* Refundable tax credits paid to state and local governmental issuers of bonds - New Form 8038-CP
- Revision to Form 8912
| | Regulated Investment Companies Bond Credits | Top |
- For Tax Year 2009 and later years
- Pass thru of bond credits by regulated investment companies shortened from 10 years to 7 years
- Revision to Form 1120RIC
| | COBRA | Top |
- For Tax Years 2009 and 2010
- Involuntarily separated workers between September 1, 2008 and December 31, 2009 eligible for 65% premium subsidy for up to 9 months
- Former employee pays 35% of the premium cost; Employer pays 65%
- Employer eligible for credit for payments made.
- Repayment of subsidy for taxpayers with AGI over $125,000 ($250,000 joint filers)
- Revisions to Forms 941, 941X, 941X-PR, 943, 943PR, 943X-PR, 944, 944-PR, 944-SS, 944X, 944S-PR, 1040
|
|
