American Recovery and Reinvestment Act of 2010

Tax Tips (NEW)

Making Work Pay Credit. IRS has made the 6.2% tax credit on earned income that is capped at $400 for singles and $800 for married couples available once again this tax year 2011.

Homebuyer Tax Credit. 2010 returns claiming the home buyer credit can now be electronically filed. Last year, taxpayers who claimed the credit on Form 5405 couldn't e-file because they had to attach a copy of the settlement sheet to the 1040. For 2010, IRS officials say that filers taking the credit can scan the settlement sheet and attach the file to their electronically filed returns. That will speed up refunds. Only homes purchased before May 1, 2010 can get the credit, except that individuals who had signed a binding contract by April 30 had until September 30 to close the deal. No credit is allowed for purchasing a home after November 6 from your in-laws. That shuts the loophole in the rules barring the credit for homes bought from relatives. The ban on claiming the credit also applies to heirs buying a home from an estate.

Energy Incentives. Several of these benefit highly specialized energy production projects. Provisions with broad interest to individuals include extension through 2010 and expansion of the tax credits for personal energy property purchases such as new furnaces, energy-efficient windows and doors, or insulation. 
~ The current 30% credit will fall to 10%, the $1,500 ceiling will decline to just $500 and there will be lower caps on particular items. No more than $150 can be claimed for furnaces and water heaters, $200 for windows and $300 for biomass fuel stoves.
Nor will the credit be OK'd for payments using state or federally subsidized financing. Credits claimed in prior years, including 2009 and 2010, will count against the $500.