The IRS is implementing the tax-related provisions of the American Recovery and Reinvestm
ent Act of 2009 (ARRA) as quickly as possible. More information on these and other provisions of the recovery program will be available on this Web site as it becomes available.
Information for Individuals
Some of the provisions of the law primarily affect individuals:
Making Work Pay Tax Credit. This tax credit means more take-home pay for many Americans. To make sure enough tax is withheld from their pay, taxpayers can use the IRS withholding calculator.
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 or other taxes and fees they paid in states with no sales tax.
Enhanced Credits for Tax Years 2009, 2010. Find details on the earned income tax credit, additional child tax credit and the American Opportunity Credit, a new higher education benefit.
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.
$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.
Energy Efficiency and Renewable Energy Incentives.
Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.
Information for Businesses
Some of the provisions of the law primarily affect businesses:
Making Work Pay Tax Credit. Businesses should use the new withholding rates for their employees. For pension plan administrators, new optional withholding procedures are available to supplement the February withholding tables.
Work Opportunity tax credit. This newly-expanded credit adds returning veterans and “disconnected youth” to the list of new hires covered by the credit that businesses may claim. Certification by the state work force agency is required.
COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.
Energy Efficiency and Renewable Energy Incentives.
Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago.
Municipal Bond Programs. There are new ways to finance school construction, energy and other public projects.
The law could affect some 2008 tax returns due in 2009. However, most of the changes in ARRA will affect 2009 individual tax returns filed next year and due April 15, 2010.