Congress has approved new economic stimulus legislation, the American Recovery and Reinvestment Act of 2009.
Here are a few that we have been getting on the legislation. For those of you that want more information the following is a link to the Senate Finance Committee 11 page summary of the income tax provisions. summary of the key provisions
Could the new legislation affect 2008 tax returns? Generally, no. The new legislation does not have any major impact for the vast majority of individuals preparing their 2008 tax returns due April 15. Instead, these changes will largely impact 2009 tax returns filed next year, in 2010. Taxpayers should continue to prepare their 2008 tax returns as they normally would.
There are a few limited areas in the legislation that could impact 2008 tax returns. For example, for some small businesses, changes in the net operating loss provisions could affect 2008 tax returns. More details on this and other changes — such as the first-time homebuyer’s credit — will be available soon.
When and how will people get the $400 to $800 “Making Work Pay” tax credit? Taxpayers will not get a separate, special check mailed to them like last year’s economic stimulus payment. For many taxpayers, the additional credit will automatically start showing up in their paychecks this spring. For people who receive a paycheck, the credit will typically be handled by their employers through automated withholding changes. For some other people, the credit can be claimed when they file their 2009 tax return next year.
More details about the “Making Work Pay” credit will be available soon, including an updated version of the withholding tables contained in Publication 15, (Circular E), Employer’s Tax Guide.
Does this new stimulus legislation have any impact on the recovery rebate credit for 2008 tax returns being filed now? No.
More information on the new law as it becomes available.
Larry Kopsa CPA
