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The American Recovery and Reinvestment Act of 2009: Information Center

The IRS is implementing the tax-related provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) as quickly as possible.

Information for Individuals

• Making Work Pay Tax Credit. This tax credit means more take-home pay for many Americans.
• First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement.
• Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid or other taxes and fees they paid in states with no sales tax.
• Education benefits. The new American opportunity credit and enhanced benefits for 529 college savings plans help families and students find ways to pay higher education expenses. 
• Enhanced Credits for Tax Years 2009, 2010. Find details on the earned income tax credit and the additional child tax credit.
• Increased Transportation Subsidy. Employer-provided benefits for transit and parking are up in 2009.
• Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.
• $250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board.
• Energy Efficiency and Renewable Energy Incentives. See what individuals can do to reap tax rewards.
• Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.

Information for Businesses

• Making Work Pay Tax Credit. Businesses should use the new withholding rates for their employees. For pension plan administrators, new optional withholding procedures are available to supplement the February withholding tables.
• Work Opportunity tax credit. This newly-expanded credit adds returning veterans and “disconnected youth” to the list of new hires covered by the credit that businesses may claim. Certification by the state work force agency is required.
• COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.
• Energy Efficiency and Renewable Energy Incentives. See what businesses can do to reap tax rewards.
• Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carryback, an expanded section 179 deduction and other business-related provisions, is now available.
• Municipal Bond Programs. There are new ways to finance school construction, energy and other public projects. 

2008 and 2009 Tax Returns 

The law could affect some 2008 tax returns due in 2009. However, most of the changes in ARRA will affect 2009 individual tax returns filed next year and due April 15, 2010.