WASHINGTON, DC – Today, Congresswoman Carol Shea-Porter announced that middle-class Granite Staters will see an increase in their take-home pay beginning tomorrow, April 1. As part of the American Recovery and Reinvestment Act (ARRA) of 2009, individuals earning less than $95,000 per year will have less federal taxes withheld from their paychecks. This is the largest middle class tax cut in American history.
“I was pleased to vote for this change in the tax code that will put more money in the pockets of middle class New Hampshire families,” said Congresswoman Shea-Porter. “This will also help the local small businesses where people go to shop.”
The Making Work Pay provision of the ARRA provides a refundable tax credit of up to $400 for working individuals and $800 for married taxpayers filing joint returns through 2010.
For workers who receive a paycheck and are subject to withholding, the credit will generally be handled by their employers through automated withholding changes made by tomorrow, April 1. If an employee is eligible for the maximum amount of the tax credit, and the employer begins using the revised tax tables starting April 1, an employee can expect to bring home an additional $44 each month as a single filer and $89 as joint filers.
ADDITIONAL TAX RELIEF PROVISIONS IN ARRA:
- Money back for new vehicle purchases: Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid.
- 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.
- 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.
- 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.
- Enhanced credits for tax years 2009, 2010. Details available on the earned income tax credit, additional child tax credit and the American Opportunity Credit, a new higher education benefit.
- $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.