2009 American Recovery and Reinvestment Act (some highlights from 50 major provisions)

Making Work Pay Credit (09-10) maximum of $400 Credit if you have at least $6452 of W2 or Self employment income ($800 for Married Filing Jointly (MFJ) for earned income of $12904) if AGI under $75,000 ($150,000 for MFJ).

$250 Economic Recovery Payment A one-time payment to individuals on fixed incomes primarily Social Security Recipients, railroad retirees, and disabled veterans.  This will reduce Making Work Pay Credit if  an individual qualifies for both.

First Time Homebuyer Credit increased $500 to $8,000 waived payback for purchasers in 2009.  New Law passed 11/6/2009 extends this benefit until June 30, 2010.

Child Tax Credit  (09-10) Provides that refundable portion of child credit is calculated to apply to 15% of earned income in excess of $3,000.

Deduction for Tax on Purchase of Vehicle (2009) Above the line deduction of state and local sales tax on vehicle purchases. (includes motorcycles, SUVs and light trucks) but phrases out for AGI over $125,000 ($250,000 for MFJ)

Suspension of Tax on Unemployment Compensation (2009) Excludes up to $2,400 of unemployment compensation from gross income.

Education Credit (09-10) Hope Credit increased to 100% of first $2,000 and 25% of next $2,000 ($2,500) and extended from first 2 years to 4 years.  Increases AGI phrase out limit to $80K (160K for MFJ).  You can now also use Section 529 funds to buy a computer for use in college.

Credit for Nonbusiness Energy Property (09-10) Reactivates these credits and updates the efficiency standards.  Eneryg efficient materials may qualify for up 30% tax credit up to maximum credit of $1,500. These include exterior windows, furnaces, air conditioners, water heaters, stoves, main circulating fans and certain metals roofs.

AMT Exemptions (2009) Increases the exemption amounts to $70,950 for MFJ $46,700 for singles and $35,475 for MFS.

Business Relief  (2008) NOL Carryback can now back five years, 50% Bonus Depreciation extended for property placed in service during 2009, Work Opportunity Credit to cover unemployed veterans and disconnected youth hired in 2009 and 2010.