This act contains many credits from general to education, AMT, businesses, and energy.

General credits

The Making Work Pay Credit applies to tax years 2009 and 2010 and provides a refundable credit equal to 6.2% of earned income or $400, whichever is less.

The First-time Homebuyer Credit is extended to purchases made before 12/31/2009 and the maximum amount is increased to $8000. Additionally, the repayment is waived for purchases made in 2009.

An adjustment was made to the Child Tax Credit where the refundable portion is calculated to apply to 15% of earned income in excess of $3000.

The Deduction for Tax on Purchase of Vehicle allows taxpayers to deduct the sales and excise taxes paid when purchasing a new vehicle in 2009 whether they itemize or not.

For 2009, up to $2400 of unemployment compensation is exluded from gross income through the Suspension of Tax on Unemployment Compensation.

Education

The American Opportunity Tax Credit applies to 2009 and 2010 and increases the Hope credit to 100% for the first $2000 and 25% of the next $2000. This is only available for the first 4 years of post-secondary education. Additionally it has been extended to apply to course materials, increases the AGI phaseout limits, provides a new credit against AMT liability, and also makes a portion refundable.

Through the Computer Technology Treated as Higher Education Expense provision, taxpayers may use distributions from Section 529 accounts while enrolled at an educational institution to purchase computer technology, equipment, internet access, and related services.

AMT

The new AMT Exemptions for 2009 increase the exemption amounts to $70950-Married Filing Joint, $35475-Married Filing Separate, and $46700 for unmarried filers.

Non-refundable Credits Offset AMT allows taxpayers to offset AMT liability for 2009 with non-refundable personal credits.

Business

If you own or operate a business please consult your tax professional for information that may be applicable to your specific situation. If you would like an email with the credit information please click here.

Energy

All the modifications apply to tax years 2009 and forward and should be used for planning purposes with your tax professional. If you would like an email with the changes please click here