|Copyright:||(c) 2010 Federal Information & News Dispatch, Inc.|
|Source:||Federal Information & News Dispatch, Inc.|
A summary of some of the larger sections of the law are provided below. For more detailed information about the tax law, speak with a tax advisor or visit the
The law extends unemployment benefits at their current level through the end of 2011.
PAYROLL TAX CUT FOR WORKERS
The law creates a new 2% payroll tax cut for over 155 million workers.
JOB CREATING TAX CUTS FOR WORKING FAMILIES
Child Tax Credit: The current
Reductions in individual income tax rates. The law extends the existing individual income tax brackets for two years.
Capital Gains and Dividends. The law extends the current capital gains and dividends rates for all taxpayers for an additional two years. Under current law, the capital gains and dividend rates for taxpayers below the 25% bracket is equal to zero percent. For those in the 25% bracket and above, the capital gains and dividend rates are currently 15%.
The law extends the dependent care credit through 2012. The dependent care credit allows a taxpayer a credit for an applicable percentage of child care expenses for children under 13 and disabled dependents.
Extends adoption tax credits. Taxpayers that adopt children can receive a tax credit for qualified adoption expenses. A taxpayer may also exclude from income adoption expenses paid by an employer.
Extends the credit for employer expenses for child care assistance.
Earned Income Tax Credit (EITC). The law extends third-child EITC. Under current law, working families with two or more children currently qualify for an earned income tax credit equal to 40% of the family’s first
EDUCATION TAX CREDITS
American Opportunity Tax Credit: The law extends a partially refundable tax credit of up to
Extends Coverdell Education Savings Accounts. These plans are tax-exempt savings accounts, up to
Extends the expanded exclusion for employer-provided educational assistance. An employee may exclude from gross income up to
Extends the student loan interest deduction.
Extends the above-the-line deduction for certain expenses of elementary and secondary school teachers. Teachers and other school professionals may deduct expenses paid or incurred for books, supplies, computer equipment and supplementary materials used by the educator in the classroom.
BUSINESS TAX CUTS TO INCREASE INVESTMENT AND GROWTH:
Extends the R&D tax credit: The law includes a 2-year extension of the R&D tax credit and other tax incentives to support business expansion.
Extends the New Markets Tax Credit. Under this program, tax credits encourage significant private investment in businesses in low-income communities.
Employer wage credit for activated military reservists. The law extends for two years the provision that provides eligible small business employers with a credit against the taxpayer’s income tax liability for salaries of activated military reservists.
Work opportunity tax credit (WOTC). Under current law, businesses are allowed to claim a work opportunity tax credit for new hires in targeted areas.
Exclusion of small business capital gains. Generally, non-corporate taxpayers may exclude 50 percent of the gain from the sale of certain small business stock acquired at original issue and held for more than five years. The provision extends the 100 percent exclusion of the gain from the sale of qualifying small business stock that is acquired before
Extension of bonus depreciation. Under current law, businesses are allowed to recover the cost of capital expenditures over time according to a depreciation schedule. For investments placed in service after