Tax Provisions In The American Recovery And Reinvestment Act of 2009
Congress has approved and the President has signed new economic stimulus 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:
- 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 .
- $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.
- Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid.
Information on other provisions of the stimulus law will be available on the Web site, IRS.gov, as they become available.
Following are a few general questions and answers regarding the new stimulus package:
Could the new legislation affect 2008 tax returns? Generally, no. The new legislation does not have any major impact for the vast majority of individuals preparing their 2008 tax returns due April 15. Instead, these changes will largely impact 2009 tax returns filed next year, in 2010. Taxpayers should continue to prepare their 2008 tax returns as they normally would.
There are a few limited areas in the legislation that could impact 2008 tax returns. For some small businesses, changes in the net operating loss provisions could affect 2008 tax returns. More details on this and other changes — such as the first-time homebuyer's credit — will be available soon.
Does this new stimulus legislation 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 legislation?
The IRS will be providing more details on this web site as it becomes available. A summary of the key provisions is available from the Senate Finance and House Ways and Means committees.
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