2009 Stimulus Package: Good News!
President Obama signed the American Recovery and Reinvestment Act into law on February 17, 2009. It is an economic stimulus bill giving tax breaks to taxpayers of all ages, income levels, and also to businesses. The tax changes will affect your 2009 tax returns. http://www.recovery.gov/. Read the Act! It’s only 407 pages! http://www.whitehouse.gov/the_press_office/ARRA_public_review/.
Here are the highlights:
− Workers and the self-employed will get a payroll tax credit for 2009 and 2010 of up to $400 a year for single taxpayers and up to $800 for couples filing jointly.
− COBRA health insurance: This government subsidy will help more unemployed people afford to keep health insurance.
− The bill increases the $7,500 first-time homebuyer credit to $8,000 for primary residences purchased between January 1, 2009 and November 30, 2009, and eliminates the requirement that the credit be repaid, as long as the house isn’t sold within three years.
− The first $2,400 of unemployment income will be nontaxable.
− The Hope Credit for college costs increases to $2,500 for 2009 and 2010, covering 100 percent of the first $2,000 of tuition and related expenses per year and 25 percent of the next $2,000.
− The credit is available for all four years of college, up from only two years, and covers the cost of books.
− The bill allows for tax-free distributions from Section 529 College Savings Plans to cover computer purchases.
− New car sales tax deduction: Buyers of new cars, light trucks, SUVs, motorcycles and motor homes during 2009 can deduct the state sales or excise tax they pay.
− One-year "patch" on the Alternative Minimum Tax (AMT): increase in the minimum tax exemptions to $70,950 for couples filing jointly and $46,700 for single filers.
− More couples who file jointly and have children will qualify for the Earned Income Credit.