May 26, 2010
What Is the Status of the Tax Cuts Put in Place under President Obama?
The "American Recovery and Reinvestment Tax Act of 2009" contained eight provisions affecting the individual income tax: (1) the "Making Work Pay" tax credit; (2) an extension of the so-called "AMT patch" through 2009; (3) increased eligibility for the refundable child tax credit; (4) the creation of the partially refundable "American Opportunity" education tax credit; (5) an expansion and extension of the "homebuyer" tax credit; (6) an increase of the earned income tax credit; (7) temporary exclusion of unemployment benefits from taxation; and (8) the sales tax deduction for automobile purchases.
While the homebuyer credit extension cited above expired in November 2009, it was extended once again until April 2010, when it eventually expired. Obama has not indicated he would support bringing that credit back.
President Obama's budget has proposed extending the life of the "Making Work Pay" tax credit through 2011 and indexing AMT exemptions to inflation each year. The administration would also continue increased eligibility for the refundable child tax credit and continue the "American Opportunity Credit." It has also proposed continuing the increase of the earned income tax credit called for in the stimulus plan. Finally, in his budget, the President calls for the provisions allowing exclusion of unemployment benefits from taxation and the sales tax deduction for automobile purchases to expire.