IRS Info on the American Recovery and Reinvestment Act of 2009

WASHINGTON -- The new American Recovery and Reinvestment Act of 2009 is the subject of many conversations and is generating many questions which center on how will this affect taxpayers this filing season and next. IRS has placed information to help answer the questions on the IRS website at: Tax Provisions in the American Recovery and Reinvestment Act of 2009. IRS is working diligently to complete an analysis of the new legislation to determine its full effect on processes and forms and to implement them. We are committed to doing this as quickly – but more importantly – as thoroughly as possible and will be providing regular updates.

Here are some key highlights:

• COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals. 
• First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement. 
• Payroll Checks Increase This Spring. The Making Work Pay Tax Credit will mean $400 to $800 for many Americans. The IRS has issued new withholding tables for employers. 
• $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. 
• Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid.
  

Please monitor the IRS Website for the latest information over the course of the next few weeks and months.