Recovery Act Recap

The Obama stimulus plan, also known as ARRA - the 2009 American Recovery and Reinvestment Act, is over a year old. Here's a summary of all the tax code changes:

March 3 Did you receive an Economic Recovery Payment?
Feb. 8 You could owe the IRS this year
Jan. 24 Don't forget to take the Making Work Pay Credit
Dec. 28 Make home improvements & lower your tax bill
Dec. 26 Tax break for the unemployed
Dec. 24 Bought a car? Don't forget Sales Taxes
Dec. 22 More Eligible for Child Tax Credit
Dec. 20 Earned Income Tax Credit going up
Dec. 19 Higher credit for college students
Dec. 17 I'm a First-Time Homebuyer. What can I claim on my taxes?

In addition, the ARRA included:

• Extension of AMT relief for 2009
• Increased Transportation Subsidy
• Health Coverage Tax Credit

Make home improvements & lower your tax bill

You can receive a tax credit up to $1,500 this year for making energy efficient improvements to their homes. Under the American Recovery and Reinvestment Act (ARRA), the Residential Energy Credit has been increased to the smaller of 30% of the cost of qualifying improvements or $1,500 for improvements placed in service during 2009. The total credit is limited to $1,500 for both the 2009 and 2010 tax years combined.

Qualifying home improvements include:

• Energy-efficient exterior windows, doors and skylights
• Energy-efficient heating and air conditioning systems
• Insulation
• Water heaters (natural gas, propane or oil)
• Roofs (metal and asphalt)
• Biomass stoves

The credit only applies to a principal residence in the United States. To take advantage of this credit, complete Form 5695 and report the total on Form 1040, line 52. Please note, a similar law was in effect in 2007 where the maximum credit was $500.