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Take advantage of tax credits

Assemblyman Michael R. Benedetto wants his constituents to be aware of new federal benefits that they may be qualified for.

“In response to the recession, President Obama and Congress passed the American Recovery and Reinvestment Act of 2009 to get our economy moving again. And the most effective way to get our economy working is to provide relief to our families,” said Benedetto.

“I urge all my constituents to take advantage of the tax benefits being made available to them,” continued Benedetto.

A major portion of the tax provisions affect tax years 2009 and 2010 – individual tax returns due April 15, 2010 and 2011 respectively. Here is a summary:

• Making Work Pay – A refundable tax credit of up to $400, or $800 if filling a joint return;

• First-time Homebuyer Credit Amended – A refundable tax credit of up to $8,000 for homes purchased December 1, 2009 (criteria apply);

• Special Tax Break for Purchase of a New Vehicle – A deduction for state, local, sales and excise taxes and other fees paid when buying a new car, light truck, motor home, or motorcycle from February 17 through December 31, 2009;

• Temporary Increase in Earned Income Tax Credit - Increase to income limits and credit percentages for working families with three or more qualifying children;

• Temporary Increase in Refundable Portion of Child Tax Credit – Reduces the minimum earned income amount used to calculate the additional tax credit to $3,000;

• Temporary Suspension of Tax on Portion of Unemployment Benefits – For tax year 2009, taxpayers can exclude up to $2,400 of unemployment compensation;

• The American Opportunity Tax Credit – Hope Credit extended two years, and up to $2,500 of allowable expenses may be refundable;

• Qualified Opportunity Tax Credit (Sec 529 Accounts) – For 2009 and 2010, qualified expenses for higher education tax free distributions is expanded;

• Residential Energy Credits – 30% break of up to $1,500 for adding qualifying improvements placed into service in 2009 and 2010 (i.e. insulation, energy-efficient exterior windows, heating and cooling systems).

To learn more about the American Recovery and Reinvestment Act of 2009 visit www.irs.gov/recovery.

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