Thanks to my trusty T. Rowe Price monthly newsletter for putting all the information I was wondering about in one place! The 2009 American Recovery & Reinvestment Act, designed and implemented to try to help get America moving forward again, has a bunch of different aspects to it that help out individual taxpayers that you might not know about. (I know I didn’t know the full scope of some of these before I read this in the newsletter!). So without further ado, here are some of the provisions in the American Recovery & Reinvestment Act that could directly affect or benefit you:
For First-Time Home Buyers
First-time home buyers may be eligible for an $8,000 tax credit if the home is purchased before November 30, 2009. (A tax credit comes right off your tax due bill) For individual tax filers you must make less than $75,000 per year and for joint tax filers you must make less than $150,000.
New Vehicle Purchase Tax Deduction
For an automotive purchase price of up to $49,500, state, local, and/or excise taxes may be deductible until December 31, 2009.
Unemployment Benefits Increased And Extended
Paid out benefits have increased by about $25 a week, with a total increase of about $650 over the 26-week benefits period. The first $2,400 in benefits is exempt from federal income taxes. Those filing for unemployment in 2009 may be eligible for an additional 33 weeks of benefits.
COBRA Health Insurance Premiums Partially Subsidized
The Feds will subsidize 65% of COBRA premiums for up to 9 months after you lose your job. Eligibility period is from September 1, 2008 until December 31, 2009. This could come in handy as COBRA payments are usually incredibly high.
Energy-Efficiency Improvements Tax Credit
Through all of 2010, you may be eligible for a tax credit on energy-efficiency upgrades you do to your home. This includes things like new windows and doors, insulation, furnaces, etc.. The credit usually amounts to 30% of the cost up to a maximum of $1,500. Thinking of going solar? Solar panels, hot water heaters, and other alternative energy improvements are eligible for a credit of 30% with no maximum. Now is definitely the time to go green!
College Tuition Tax Credit
The American Opportunity tax credit offers up to $2,500 per year towards college costs in 2009 and 2010. Single tax filers must make less than $80,000 to be eligible; joint filers less than $160,000.
Making Work Pay Tax Credit
This tax credit is equal to 6.2% of earned income, with a maximum credit of $400 for individuals or $800 for married couples. The credit reduces tax withholding from paychecks over the year, or about $13 in additional pay per week. I am all for this way of giving back a little money slowly rather than by sending out checks like last time.