What is the ARRA’ 09?
On Tuesday, February 17, 2009 P.L. 111-5(H.R.I) the American Recovery and Reinvestment Act of 2009 (ARRA) was signed into law by the President. ARRA includes key provision that impact individuals and families.
The “Making Work Pay”Tax Credit will cut taxes for working families in 2009 and 2010 by providing a refundable credit of up to $400 for working individuals and $800 for those who are married filing jointly. The credit is phased out once your income exceeds a certain limit. It is being paid to employees through a reduction in their federal income tax withholding starting in April 2009. The IRS has a “Withholding Calculator” available at WWW.IRS.gov, check it out and make sure you are having the proper amount withheld to avoid owing the IRS.
The “Economic Recovery Payment”is provided for individuals who no longer work and are receiving SS, SSI, RR benefits or Veterans Disability payments. This $250 payment will come directly through the same channels in which you’re now receiving benefits and will reduce the amount of “Making Work Pay” credit you may receive.
Earned Income Tax Credit and Child Tax Credits will increase, allowing for a larger credit for 3 or more children and a higher threshold of income eligible to receive the credits
The American Opportunity Education Credit is now expanding from and replacing the former “Hope” credit, to cover the first 4 years of qualifying post secondary education expense. A 40% credit up to $2,500 per year.
First-Time Home-Buyer credit has increased to $8000, from homes purchased from 01/01/2009- 11/30/2009. If you live in the home for at least three years, you wont have to pay it back!!
Energy Conservation Incentives for a variety of energy saving upgrades or additions to your home, including : Windows, doors, insulation,roofing, HVAC,water-heaters,bio-mass stoves and more. This credit of up to $1500, could also help you save on your electric bill.
Unemployment Benefits, a temporary suspension of federal income tax is now available on the first $2400 of unemployment benefits received in 2009. Voluntary with-holdings be requested on form W-4V.
New Car Sales Tax Deduction for sales taxes paid on the first $49,500 of the cost of a vehicle purchased after 02/16/2009. (For individuals with income limits under $125,000/$250,000 if jointly) And you don’t have to itemize to get it!
For more information on the ARRA ’09 provisions see the website: WWW.IRS.GOV
All information above is from the IRS website