Norton Gives Selected Preview of Stimulus Tax Breaks Helping Residents at Press Conference (2/14/09)

Norton Gives Selected Preview of Stimulus Tax Breaks that Help Residents at Tax Fair Press Conference

February 14, 2009

Washington, DC-Congresswoman Eleanor Holmes Norton (D-DC), at her Annual Tax and Information Fair press conference this morning, Saturday, February 14, at 11 a.m., will give residents a quick preview of a new or extended crop of tax credits passed on Friday in the American Recovery and Reinvestment Act. "President Obama has kept his word and refocused tax breaks on poor and middle-income people," Norton said. "Whether the tax credit for plug-in vehicles, a 65% subsidy for continuing health insurance benefits after a job loss, or $250 for retirees and the disabled, this bill focuses tax relief where it has been missing and most needed. What follows is a summary statement of each of several selected tax breaks in the stimulus bill for individuals, families and businesses.

A Quick Study Preview of Some Tax Breaks for Individuals and Families:

"Making Work Pay" Tax Credit

Tax cut for 95% of working families, by providing a refundable tax credit in 2009 and 2010 of up to $400 for working individuals and $800 for working families.

Premium Subsidies for COBRA Continuation Coverage for Unemployed Workers

65% subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated, and for their families. This subsidy also applies to health care continuation coverage if required by states for small employers.

Payment to Recipients of Social Security, SSI, Railroad Retirement and Veterans Disability Compensation Benefits

One-time payment of $250.

Increase in Earned Income Tax Credit

Temporary increase in the earned income tax credit for working families with three or more children.

Temporary Suspension of Taxation of Unemployment Benefits

For 2009, suspends federal income tax on the first $2,400 of unemployment benefits per recipient.

Extension of Emergency Unemployment Compensation

Through December 31, 2009, the bill continues the Emergency Unemployment Compensation program, which provides up to 33 weeks of extended unemployment benefits to workers exhausting their regular benefits.

Increase in Unemployment Compensation Benefits

Increase in unemployment weekly benefits by an additional $25 through 2009.

Increase in Eligibility for the Refundable Portion of Child Credit

"American Opportunity" Education Tax Credit

The bill would provide financial assistance for individuals seeking a college education. For 2009 and 2010, the bill would provide taxpayers with a tax credit of up to $2,500 of the cost of tuition and related expenses.

Computers as Qualified Education Expenses in 529 Education Plan

Section 529 Education Plans are tax-advantaged savings plans that cover all qualified education expenses, and computers and computer technology will now qualify.

Sales Tax Deduction for Vehicle Purchases

Taxpayers will get a deduction for state and local sales and excise taxes paid on the purchase of new cars, light trucks, recreational vehicles, and motorcycles through 2009.

Extension of Alternative Minimum Tax Relief for 2009

Provides more than 26 million families with tax relief in 2009 by extending AMT relief for nonrefundable personal credits and increasing the AMT exemption amount by $70,950 for joint filers and $46,700 for individuals.

Temporary Assistance for Needy Families Contingency Fund

Creates through FY 2010 a capped, temporary TANF Emergency Contingency Fund to provide states with relief.

Expansion of Trade Adjustment Assistance Programs for Displaced Workers

Homebuyer Tax Credits

See chart attached.

Some Notable Business Tax Credits:

• The bill creates a new category of tax credit bonds for the construction, rehabilitation, or repair of public school facilities or for the acquisition of land on which a public school facility will be constructed.
• Expansion of new markets tax credit.
• Long-term extension and modification of renewable energy production tax credit.
• Plug-in electric drive vehicle station credit.
• Five-year carry back of net operating losses for small businesses.