American Recovery and Reinvestment Act
In prior years, you might have received tax benefits courtesy of the American Recovery and Reinvestment Act of 2009 (ARRA). Some ARRA provisions have expired. However, some were extended through 2012 by the Tax Relief Act of 2010. Some were further extended by the American Taxpayer Relief Act of 2012 (ATRA).
Benefits that apply to 2015 and returns for 2009-2014 include:
Earned Income Credit (EIC): Families with three or more children got an increased EIC. Also, if you’re married filing jointly, you received an additional penalty relief. When you file your 2017 return, confirm your EIC amount on the EIC chart.
Additional child tax credit: Lower-income families with children received increased eligibility for the refundable portion of the credit.
Nonbusiness energy property credit: If you made energy improvements to your home, you might be able to claim this credit for your 2009-2014 returns. The credit is subject to a lifetime limit of $500.
Depending on the type of property, you can claim either of these:
- 10% of the property’s cost
- $50-$300 — A specific amount allowed for the type of property
You might qualify if you made these improvements to your home:
- Biomass stoves
- Heating, ventilating, air conditioning (HVAC)
- Roofs (metal and asphalt)
- Non-solar water heaters
- Windows and doors
Residential energy efficient property credit: You might be a homeowner who invests in energy enhancements. If so, you’ll receive an increased credit when filing your 2009-2016 returns. You can claim a credit and get back up to 30% of your costs if you installed any of these energy enhancements:
- Solar panels
- Solar water heaters
- Geothermal heat pumps
- Fuel cells
- Small wind turbines
American Opportunity Credit: You can apply this to qualified education expenses for the first four years of higher education. The maximum credit is $2,500, of which 40% is refundable. The credit begins to phase out if you have an adjusted gross income (AGI) of more than:
- $160,000 if married filing jointly
Plug-in electric drive vehicle credit: The credit benefits you if you bought a qualified plug-in electric motor vehicle after 2009. The credit is limited to $7,500. The amount begins to decrease after the manufacturer sells 200,000 plug-in vehicles
If you buy a plug-in vehicle, ask the dealer about the credit. You’ll claim the credit when you file your return for the year you bought the vehicle.
To qualify, the vehicle must:
- Be used mainly on public streets
- Weigh less than 14,000 pounds
- Be capable of speeds over 45 miles per hour
- Draw power from a battery with at least four kilowatt hours
- Use an external source to recharge the battery
- Be IRS certified
COBRA health insurance continuation premium subsidy: If you were jobless in past years, you might qualify to receive a federal subsidy. It can be up to 65% of monthly COBRA premiums for 15 months. You must have been involuntarily terminated between Sept. 1, 2008, and May 31, 2010. Employers should notify you if you’re eligible.
The subsidy isn’t taxable to the recipient. However, eligibility for the subsidy phased out if you had a modified AGI between:
- $125,000 and $145,000
- $250,000 and $290,000 if married filing jointly
For 2011, you might have had to recapture your subsidy amounts if your income fell into the phase-out ranges.
Homebuyer credit: First-time homebuyers who bought a home could receive up to an $8,000 refundable credit. They must have bought the home after April 8, 2008, and before May, 1, 2010. Phase-out of this credit started at $75,000 — or $150,000 if married filing jointly.
After Nov. 6, 2009, both of these applied:
- The credit phase-out started at $125,000 — or $225,000 if married filing jointly.
- The homebuyer credit was expanded to provide up to a $6,500 credit. This applied to long-time homeowners who bought a replacement home.
The first-time homebuyer credit expired as of 2012.
In 2011, it was only available in limited circumstances for service members overseas.
Section 529 plan distributions: Distributions are tax-free if less than qualified education expenses.
Qualified education expenses include:
- Tuition and fees
- Books and supplies
- Equipment required for enrollment
- Special needs services
- Room and board
To learn more about how the government distributes stimulus-package money, visit www.recovery.gov.
Are political contributions tax deductible? Before signing a check, learn the difference between charitable giving and political donations at H&R Block.
Do you know what your tax filing status is? Learn how to determine and check your tax filing status with H&R Block.
Tax season is right around the corner! Consider how the withholding allowances claimed on your Form W-4 could affect your income tax refund by visiting the Tax Information Center blog.
What’s the difference between an enrolled agent (EA) vs. a certified public accountant (CPA)? Explore the roles of EAs and CPAs at H&R Block.