1 NTTC Training 2009 American Recovery and Reinvestment Act of 2009 Publication 553 – Highlights of Changes

2 NTTC Training 2009 Making Work Pay Credit  Refundable Credit  Line 63 Form 1040 – Schedule M  Up to $400, $800 MFJ  Based on 6.2% of earned income  Phased out AGI $75,000 ($150,000 joint)  Based on Earned Income  Reduced by $250 if SSA, VA, RRB  Government Retirees not covered SS  not elig for SSA, VA, RRB - receive $250

3 NTTC Training 2009 First Time Homebuyer Credit  2009 purchases until Nov 30, 2009  $8000, is refundable and may not be repaid  2008 rules unchanged  Purchases Apr 9-Dec 31, 2008  $7500, 15-year repayment

4 NTTC Training 2009 New Vehicle Taxes Deduction  State and Local Sales Tax and Excise Taxes  On first $49,500 of purchase price  Purchases after Feb 16, 2009 and before 2010  Available to non-itemizers  Schedule L to calculate deduction

5 NTTC Training 2009 Increased Credits  Residential Energy Credits – expired in 2007 has been reinstated  Temporary increase in EITC  Up to three or more qualified children – up to $5,657  Maximum income $43,279 ($48,279 joint) for three or more qualified children  Reduction of earned income needed to claim ACTC

6 NTTC Training 2009 Education  American Opportunity Tax Credit – (Hope Credit Expanded)  Increase to $2500 per student  First four years post-secondary education  40% of the credit is refundable  Required course materials allowed  Expenses for computers, software and internet access allowed

7 NTTC Training 2009 Other Changes  Definition of Qualifying Child Revised  New rules for children of divorced or separated parents  After July 2, 2008  Effective calendar year following year release is provided  Form 8332 release attached to return  Unemployment Compensation  Exclude up to $2400 from Gross Income

8 NTTC Training 2009 More Information  Pub 533, Highlights of 2008 Tax Changes  ARRA will be included in training and the test Questions