President Obama will sign into law Tuesday, February 16, 2009, The American Recovery and Reinvestment Act of 2009. Below I have outlined the tax provisions of the bill based on the Full Summary of Provisions from the Senate Finance, House Ways & Means Committees. I have listed all the topics so you can sample the flavor of the bill. I will be writing more about the law’s tax provisions in the following days.
TAX RELIEF FOR INDIVIDUALS AND FAMILIES
- “Making Work Pay” Tax Credit
- Economic Recovery Payment to Recipients of Social Security, SSI, Railroad Retirement and Veterans Disability Compensation Benefits
- Refundable Credit for Certain Federal and State Pensioners
- Increase in Earned Income Tax Credit
- Increase Eligibility for the Refundable Portion of Child Credit
- “American Opportunity” Education Tax Credit
- Computers as Qualified Education Expenses in 529 Education Plans
- Refundable First-time Home Buyer Credit
- Sales Tax Deduction for Vehicle Purchases
- Temporary Suspension of Taxation of Unemployment Benefits
- Extension of AMT Relief for 2009
TAX INCENTIVES FOR BUSINESSES
- Extension of Bonus Depreciation
- Election to Accelerate Recognition of Historic AMT/R&D Credits
- Extension of Enhanced Small Business Expensing
- 5-Year Carryback of Net Operating Losses for Small Businesses
- Delayed Recognition of Certain Cancellation of Debt Income
- Incentives to Hire Unemployed Veterans and Disconnected Youth
- Small Business Capital Gains
- Temporary Small Business Estimated Tax Payment Relief
- Temporary Reduction of S Corporation Built-In Gains Holding Period from 10 Years to 7 Years
- Repeal of Treasury Section 382 Notice
- Treatment of Certain Ownership Changes
MANUFACTURING RECOVERY PROVISIONS
- Industrial Development Bonds (IDB)
- Advanced Energy Investment Credit
ECONOMIC RECOVERY TOOLS
- New Markets Tax Credit
- Recovery Zone Bonds
- Tribal Economic Development Bonds
- Modify Speed Requirement for High-Speed Rail Exempt Facility Bonds
INFRASTRUCTURE FINANCING TOOLS
- De Minimis Safe Harbor Exception for Tax-Exempt Interest Expense for Financial Institutions
- Modification of Small Issuer Exception to Tax-Exempt Interest Expense Allocation Rules for Financial Institutions
- Eliminate Costs Imposed on State and Local Governments by the Alternative Minimum Tax
- Delay Application of Withholding Requirement on Certain Governmental Payments for Goods and Services
- Qualified School Construction Bonds
- Extension and Increase in Authorization for Qualified Zone Academy Bonds (QZABs)
- Tax Credit Bond Option for State and Local Governments (“Build America Bonds”)
REINVESTMENT IN RENEWABLE ENERGY
- Long-term Extension and Modification of Renewable Energy Production Tax Credit
- Temporary Election to Claim the Investment Tax Credit in Lieu of the Production Tax Credit
- Repeal Subsidized Energy Financing Limitation on the Investment Tax Credit
- Removal of Dollar Limitations on Certain Energy Credits
- Clean Renewable Energy Bonds (“CREBs”)
- Qualified Energy Conservation Bonds
- Tax Credits for Energy-Efficient Improvements to Existing Homes
- Tax Credits for Alternative Refueling Property
- Plug-in Electric Drive Vehicle Credit
- Addition of Permanent Sequestration Requirement to CO2 Capture Tax Credit
- Parity for Transit Benefits
OTHER PROVISIONS
- Treasury Department Energy Grants in Lieu of Tax Credits
- Treasury Department Low-Income Housing Grants in Lieu of Tax Credits
ASSISTANCE FOR FAMILIES & UNEMPLOYED WORKERS
- Extension of Emergency Unemployment Compensation
- Increase in Unemployment Compensation Benefits
- Unemployment Compensation Modernization
- Temporary Assistance to States with Advances to Unemployment Trust Funds
- Additional Unemployment Provisions
- Temporary Assistance for Needy Families Contingency Fund
- Extension of TANF Supplemental Grants
- Child Support Enforcement
HEALTH INSURANCE ASSISTANCE
- Premium Subsidies for COBRA Continuation Coverage for Unemployed Workers
- Medicare Payments for Teaching Hospitals
- Medicare Payments to Hospice
- Medicare Payments to Long Term Care Hospitals
STATE FISCAL RELIEF AND MEDICAID
- Temporary Federal Medical Assistance Percentage (FMAP) Increase
- Temporary Increase in Disproportionate Share Hospital (DSH) Payments
- Extension of Moratoria on Medicaid Regulations
- Extension of Transitional Medical Assistance (TMA)
- Extension of the Qualified Individual Program
- Provisions from the Indian Health Care Improvement Act
- Prompt Payment Requirements for Nursing Facilities and Hospitals
HEALTH INFORMATION TECHNOLOGY
- Funding for Health Information Technology (IT) through Medicare and Medicaid Incentives
TRADE PROVISIONS
- Expansion of Trade Adjustment Assistance (TAA) Programs
- Duty Refund Recollection
DEBT LIMIT
- Debt Limit Increase
