Democrats, liberals claim the American Recovery and Reinvestment Act of 2009 has tax cuts. Really? Tax credits and tax cuts are two entirely different things. Here is a summary of the act from the IRS:
Information for Individuals
Can you benefit from Recovery Act tax credits? Try the White House Tax Savings Tool to find out.
Many of the Recovery Act provisions are geared toward individuals:
- Homebuyer Credit. Homebuyers who purchase by April 30, 2010, and settle by Sept. 30, 2010, may be eligible for a credit of up to $8,000. Documentation requirements apply. See the first-time homebuyer page for more.
- COBRA. Workers who lose their jobs between Sept. 1, 2008, and May 31, 2010, may qualify for reduced COBRA health insurance premiums for up to 15 months.
- Education benefits. The American opportunity credit and enhanced benefits for 529 college savings plans help families and students find ways to pay higher education expenses.
- Home energy efficiency and renewable energy incentives. See what you can do to reap tax rewards.
- Earned Income Tax Credit. The EITC is bigger in 2009 and 2010.
- Additional child tax credit. More families will qualify for the ACTC in 2009 and 2010.
- Making Work Pay Tax Credit. This credit means more take-home pay for many Americans in 2009 and 2010. Make sure enough tax is withheld from your pay with the help of the IRS withholding calculator. See Making Work Pay for more.
- $250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment was paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board in 2009. To verify whether you received it, call 1-866-234-2942 and select Option 1 or visit Did I Receive a 2009 Economic Recovery Payment? on this website.
- Money Back for New Vehicles. Taxpayers who bought new cars and certain other new vehicles in 2009 can deduct the state and local sales taxes they paid as well as other taxes and fees they paid in states with no sales tax.
- Increased Transportation Subsidy. Employer-provided benefits for transit and parking rose in 2009.
- Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.
- Health Coverage Tax Credit. This credit increased from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.
Information for Businesses
The following Recovery Act provisions affect businesses:
- Making Work Pay Tax Credit. The 2010 withholding rates, contained in Notice 1036, reflect reduced withholding. An optional withholding procedure is available for pension plan administrators.
- Work Opportunity Tax Credit. This expanded credit adds returning veterans and “disconnected youth” to the list of new hires that businesses may claim.
- COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941.
- Energy Efficiency and Renewable Energy Incentives. See what businesses can do to reap tax rewards.
- Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Find information on carrybacks, an expanded section 179 deduction and other business-related provisions. The Worker, Homeownership And Business Assistance Act Of 2009 (WHBAA) expanded the five-year NOL carryback to most businesses.
- Municipal Bond Programs. New ways to finance school construction, energy and other public projects .