Tax relief provisions in stimulus act
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PrintSeveral provisions in the American Recovery and Reinvestment Tax Act of 2009 provide temporary tax relief to individuals and families. Eligible tax payers are provided with a 6.2 percent tax credit on earned income or $400, whichever is less. This amount is $800 for joint filers. This tax credit expires after 2010. This credit is further reduced for tax payers earning more than $75,000 ($150,ooo joint filers).
The earned income tax credit is increased for taxpayers with 3 or more qualifying children. For such tax payers the earned income tax credit is 45% and is available for 2009 and 2010. The threshold amount for the phase-out of this provision for joint filers is increased.
The Act increases the refundable portion of the child tax credit for years 2009 and 2010. The Act also increases the Hope Scholarship tax credit for tuition and related expenses.
The first time home buyer tax credit is increased to $8,000 and the credit is extended through November 2009. The Act waives the repayment requirement for this credit for a home purchased after December 31, 2008, and before December 1, 2009, unless the taxpayer resells or vacates the home within 36 months of purchasing the home.
The Act allows for unemployment compensation of up to $2,400 to be excluded from gross income in 2009. And it also allows for a tax deduction for state sales and excise taxes on buying certain vehicles in 2009.
