TurboTax / Tax Calculators & Tips / All Tax Guides / Tax Planning and Checklists / 2009 Stimulus Package: What's Still In It For You in 2010

2009 Stimulus Package: What's Still In It For You in 2010

Updated for Tax Year 2010


OVERVIEW

For most taxpayers, there's more good news ahead. On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act into law -- an economic stimulus bill that gives tax breaks to a large portion of Americans of all ages and income levels, as well as to businesses. Many of those breaks continue into 2010. In late 2010, Congress passed and President Obama signed a tax relief act that added additional breaks and extended them into 2011 and beyond.


Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99*
Start for Free

Many taxpayers will get more money in their pockets in 2010

The American Recovery and Reinvestment Act: According to White House estimates, the American Recovery and Reinvestment Act gives a direct tax break to 95 percent of workers and their families. It includes tax breaks that provide a financial boost to everyone from the unemployed, to families with children and children in college, to first-time homebuyers. Here are some of the benefits that continue into 2010:

Who benefits, and how

Workers

Making Work Pay Credit: Workers and the self-employed get another payroll tax credit for 2010 of up to $400 for single taxpayers, and up to $800 for couples filing jointly.
For single tax filers, the credit begins phasing out at an Adjusted Gross Income (AGI) of $75,000. For married couples filing jointly, the phaseout zone starts at $150,000 of AGI. (Adjusted Gross Income is your total income from wages and other income minus certain adjustments, such as deductible IRA contributions and alimony paid.)

To learn more, read Making Work Pay Credit Increases Take Home Pay

Unemployed

Lowered cost for COBRA health insurance: Workers who were involuntarily terminated from their employment between September 1, 2008 and May 31, 2010, may be eligible for a 65-percent subsidy of their COBRA premiums for a period of up to 15 months. This is a valuable benefit for workers who lose their health insurance when they lose their jobs. This government subsidy should help more unemployed people afford to keep their health insurance.

To learn more, read Health Insurance Assistance for The Unemployed.

First-time homebuyers

First-time Homebuyer's Credit: If you signed a contract to buy your first house before May 1, 2010, and closed on it before October 1, 2010, you may be eligible for a tax credit of up to $8,000.

For more details, see How the First-Time Homebuyer Credit Works.

College students and their families

Expanded Hope Credit: The Hope Credit for college costs was increased to $2,500 for 2009 and 2010 and renamed the American Opportunity Credit. It covers 100 percent of the first $2,000 of tuition and related expenses per year and 25 percent of the next $2,000. In late 2010, Congress extended the credit through the end of 2012.

The credit is available for the first four years of college, up from only two years, and also covers the cost of books. It is 40 percent refundable, meaning the government could send you up to $1,000 even if you don’t owe that much in taxes. The credit begins to phase out at $80,000 of AGI for single filers and $160,000 of AGI for married couples.

The bill also allows tax-free distributions from Section 529 College Savings Plans to cover computer purchases.

To learn more, read Bigger, Better College Tax Credit.

Families

Expanded Earned Income Tax Credit (EITC): More couples who file jointly and have children will qualify for the Earned Income Credit.

The tax package starts the phaseout range at $21,420. In 2009, the credit was increased for families with three or more children to 45 percent of the first $12,570 of earned income, up from 40 percent.

To learn more, read A Stimulus Boost for Some Earned Income Tax Filers.

Enhanced Child Tax Credit: The Child Tax Credit will now cover more low-income earners: For 2010, the credit is refundable to the extent of 15 percent of an individual’s earned income in excess of $3,000.

Current Homeowners

Expanded Homebuyer's Credit: First time buyers who did not own a principal residence in the three years before the purchase are eligible for a credit of 10% of the home’s purchase price to a maximum of $8,000. If you owned your own home and lived in it for at least five of the last eight years you may qualify for a 10% credit of up to $6,500. To be eligible for the credit you must have signed the contract before May 1, 2010, and closed on the purchase before October 1, 2010.

To learn more, see Taking the 2009 First-Time Homebuyer's Credit.

For even more details, see How the First-Time Homebuyer Credit Works.

Extended energy-saving credits: The tax credit for energy-saving home improvements remains at 30 percent and was extended through the end of 2010. In late 2010, Congress extended the credit through the end of 2011. Improvements that qualify for the credit include energy-efficient insulation, windows and outer doors, along with energy-saving water heaters, central air conditioners and biomass stoves.

The bill also eliminates individual credit caps for the different types of property, and instead imposes a $1,500 cap on all qualifying property.

For more information, read Conserve Energy, Save Money with Larger Credits.

Middle-income taxpayers

Two-year "patch" on the Alternative Minimum Tax: To keep millions of middle-income taxpayers from being forced to pay the Alternative Minimum Tax (AMT), Congress in late 2010 passed a measure that increases the minimum tax exemptions to $72,450 for couples filing jointly and $47,750 for single filers in 2010 and $74,450 for couples filing jointly and $48,450 for single filers in 2011. Otherwise, the exemptions would have topped out at just $45,000 for couples and $33,750 for singles.

Small businesses

The following changes would affect small businesses:

Bonus depreciation

In late 2010 Congress increased the special 50 percent, first-year bonus depreciation to 100 percent for for assets bought and placed in service after September 8, 2010 through the end of 2011. The 50 percent bonus depreciation is available for property placed in service in 2012.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

* Important Offer Details and Disclosures
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Actual prices are determined at the time of print or efile and are subject to change without notice. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal efile of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Prices subject to change without notice.
  • TurboTax Mobile: Actual prices are determined at the time of print or efile and are subject to change without notice. Come back here before you file to confirm that the price has not changed, especially if it's been a while since you downloaded this app.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app features and content. TurboTax mobile app devices supported include Android 4.1 and above, iOS 8 on iPhone 4s and above, and iPad 2.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • About our TurboTax Product Experts: Customer service and product support (phone or chat) vary by time of year. Phone support not included with Free Edition.
  • About our credentialed tax experts: Live tax advice service is available for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Click here for full terms and conditions. Not available for TurboTax Business customers.
  • Get up to 10% on top of your federal refund: Amazon.com Gift Card offer is for federal refunds only. Limits apply ($2000 per e-card, maximum $10,000 per customer). Offer available only for TurboTax Online (except Federal Free Edition) or CD/download versions sold and shipped, or downloaded directly from Intuit or Amazon. Except as required by law, Amazon.com Gift Cards cannot be canceled, transferred for value or redeemed for cash.

    Amazon.com is not a sponsor of this promotion. Except as required by law, Amazon.com Gift Cards ('GCs') cannot be transferred for value or redeemed for cash. GCs may be used only for purchases of eligible goods at Amazon.com or certain of its affiliated websites. For complete terms and conditions, see www.amazon.com/gc-legal. GCs are issued by ACI Gift Cards, Inc., a Washington corporation. All Amazon ®, ™ & © are IP of Amazon.com or its affiliates. No expiration date or service fees.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2013 TurboTax products.
  • 4.8 out of 5 stars: Average based on customer ratings on TurboTax.com for TurboTax Online and CD/download products tax year 2014, as of January 2015.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • TurboTax CD/Download priority phone support: Priority phone support for TurboTax CD/Download Premier and Home & Business is accessible exclusively via the TurboTax.com Help Center.
  • Benefit Assist: After you file, TurboTax automatically shows you a full list of government benefits you may qualify for, like Food Stamps or reduced phone & utilities. Plus, we help you apply, saving you time and making it easier than ever to get more money! Estimate based on calculation of Benefit Assist users from tax year 2013 and published reports of average benefit and savings amounts from federal and state programs. Actual amounts and qualifications based on your individual situation; some individuals will not qualify. Feature may not be available for all customers.
  • Simplified State Experience: New, simplified state tax preparation available for most filers.
  • Eligibility for $25 cash back for returning Deluxe customers: Customers who have completed their 2013 taxes in TurboTax Deluxe (CD or download), and have completed their 2014 taxes in either TurboTax Premier or TurboTax Home & Business (CD or download), and apply here before 11:59PM PDT April 20, 2015, are eligible for $25 back. 2014 TurboTax Advantage users are ineligible for this offer. Terms and conditions are subject to change without notice.
  • $0 Upgrade Offer: Valid for customers who filed their 2013 taxes with TurboTax Deluxe (CD or download), completed prior year data transfer this year, and encounter an upgrade to either 2014 TurboTax Premier or 2014 TurboTax Home & Business (CD or download). Valid February 6, 2015 through April 20, 2015. TurboTax Advantage users are ineligible for this offer. This offer may not be combined with our $25 cash back offer. Terms and conditions are subject to change without notice.