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American Recovery and Reinvestment Act of 2009 - IRS Information (Visit this siteExternal Link to American Recovery and Reinvestment Act of 2009 - IRS Information)

IRS Information Related to the American Recovery and Reinvestment Act of 2009 (ARRA)

Congress has approved and the President has signed new economic recovery legislation, the American Recovery and Reinvestment Act of 2009. The IRS is implementing tax-related provisions of this new program as quickly as possible.

Here are some key highlights:

  • Energy Efficiency and Renewable Energy Incentives. What individuals and businesses can do to reap tax rewards.

     
  • Payroll Checks Increase This Spring. The Making Work Pay Tax Credit will mean $400 to $800 for many Americans. The IRS has issued new withholding tables for employers. Taxpayers can check the IRS withholding calculator to make sure enough tax is withheld from their pay.

  • First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement.

  • Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid.

  • Enhanced Credits for Tax Years 2009, 2010. Details on the earned income tax credit, additional child tax credit and American Opportunity Credit, a new higher education benefit.

  • Municipal Bond Programs. New ways to finance school construction, energy and other public projects.

  • Increased Transportation Subsidy. Employer-provided benefits for transit and parking are up in 2009.

  • Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.

  • Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carryback, an expanded section 179 deduction and other business-related provisions is now available.

  • COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.

  • $250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board.

  • Health Coverage Tax Credit. Credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.

More information on these and other provisions of the recovery program will be available on this Web site, CPAide.com, as it become available.

General Questions and Answers Regarding the Recovery Package

  • Could the new law affect 2008 tax returns? ARRA could affect some 2008 tax returns due April 15, 2009. For example, for some small businesses changes in the net operating loss provisions could affect 2008 tax returns. And for first-time homebuyers there is an expanded credit available on 2008 tax returns. However, most of the changes in ARRA will affect 2009 individual tax returns filed next year and due April 15, 2010.
  • Does this new recovery program have any impact on the recovery rebate credit for 2008 tax returns being filed now? No. But the IRS reminds taxpayers and tax preparers to make sure they properly determine eligibility for the recovery rebate credit before they file their 2008 federal tax returns.
  • Where are more details on the tax provisions of the recovery law?
    A summary of the key provisions is available from the Senate Finance and House Ways and Means committees.
  • For More Information

    Go to CPAide.com and search keywords "AARA 2009"

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    Added: Thu Apr 30 2009

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