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The Stimulus Plan: The Tax Cuts

The Stimulus Plan: The Tax Cuts

by Michael Grabell and Christopher Weaver, ProPublica - February 13, 2009 4:00 pm EST

Feb. 13, 10:55p.m.: This post was updated to reflect that the Senate voted for the stimulus package.

The House approved the economic stimulus plan Friday afternoon with a vote of 246 to 183, followed by the Senate with a vote of 60 to 38. Want to know what's in it? You could read the 1,071-page gorilla that passed today. Or you could let us do the work for you. We’ve dissected the beast in two charts – one for spending, and one for taxes below.

Dollar amounts for the tax provisions are based on a 10-year period, estimated by the Joint Committee on Taxation. The committee uses this period because the effects of tax cuts may occur over several years. But the estimates reflect cuts made only for the years authorized by Congress. Most cuts are authorized for one or two years.

Here’s our earlier chart comparing the differences between the House, Senate, and conference versions of the bills.

This chart and other stories are part of Eye on the Stimulus, our blog dedicated to tracking the stimulus from bill to building.

To see a certain category of tax provisions, click on one of the following: Tax Relief (Individuals) | Tax Relief (Businesses) | Business Related | Other Tax Relief | Infrastructure | Renewable Energy Tax Credits | State and Local Government Aid | Health Care | Aid to People Affected By Economic Downturn

CategoryAmount
Tax Relief for Individuals $246,869,000,000
"Making Work Pay" Tax Credit. For 2009 and 2010, the bill would provide a refundable tax credit of up to $400 for working individuals and $800 for working families. This tax credit would be calculated at a rate of 6.2% of earned income, and would phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 for married couples filing jointly). Taxpayers can receive this benefit through a reduction in the amount of income tax that is withheld from their paychecks, or through claiming the credit on their tax returns. $116,199,000,000
Economic Recovery Payment to Recipients of Social Security, SSI, Railroad Retirement and Veterans Disability Compensation Benefits. The bill would provide a one-time payment of $250 to retirees, disabled individuals and SSI recipients receiving benefits from the Social Security Administration, Railroad Retirement beneficiaries, and disabled veterans receiving benefits from the Department of Veterans Affairs. The one-time payment is a reduction to the Making Work Pay credit. $14,225,000,000
Refundable Credit for Certain Federal and State Pensioners. The bill would provide a one-time refundable tax credit of $250 in 2009 to certain government retirees who are not eligible for Social Security benefits. This one-time credit is a reduction to the Making Work Pay credit. $218,000,000
Increase in Earned Income Tax Credit. The bill would temporarily increase the earned income tax credit for working families with three or more children. Under current law, working families with two or more children qualify for an earned income tax credit equal to 40% of the family’s first $12,570 of earned income. This credit is subject to a phase-out for working families with adjusted gross income in excess of $16,420 ($19,540 for married couples filing jointly). The bill would increase the earned income tax credit to 45% of the family’s first $12,570 of earned income for families with three or more children and would increase the beginning point of the phase-out range for all married couples filing a joint return (regardless of the number of children) by $1,880. $4,663,000,000
Increase Eligibility for the Refundable Portion of Child Credit. The bill would increase the eligibility for the refundable child tax credit in 2009 and 2010. For 2008, the child tax credit is refundable to the extent of 15% of the taxpayer’s earned income in excess of $8,500. The bill would reduce this floor for 2009 and 2010 to $3,000. $14,830,000,000
"American Opportunity" Education Tax Credit. The bill would provide financial assistance for individuals seeking a college education. For 2009 and 2010, the bill would provide taxpayers with a new tax credit of up to $2,500 of the cost of tuition and related expenses paid during the taxable year. Taxpayers will receive a credit based on 100% of the first $2,000 of tuition and related expenses (including books) paid during the year and 25% of the next $2,000 of tuition and expenses paid during the year. Forty percent of the credit would be refundable. This tax credit will be subject to a phase-out for taxpayers with adjusted gross income in excess of $80,000 ($160,000 for married couples filing jointly). $13,907,000,000
Computers as Qualified Education Expenses in 529 Education Plans. Section 529 Education Plans are tax-advantaged savings plans that cover all qualified education expenses, including: tuition, room & board, mandatory fees and books. The bill counts computers and computer technology as qualified education expenses. $6,000,000
Refundable First-time Home Buyer Credit. Last year, Congress provided taxpayers with a refundable tax credit that was equivalent to an interest-free loan equal to 10% of the purchase of a home (up to $7,500) by first-time home buyers. The provision applies to homes purchased on or after April 9, 2008 and before July 1, 2009. Taxpayers receiving this tax credit are currently required to repay any amount received under this provision back to the government over 15 years in equal installments, or, if earlier, when the home is sold. The credit phases out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return). The bill eliminates the repayment obligation for taxpayers that purchase homes after Jan. 1, 2009, increases the maximum value of the credit to $8,000 and removes the prohibition on financing by mortgage revenue bonds and extends the availability of the credit for homes purchased before Dec. 1, 2009. The provision would retain the credit recapture if the house is sold within three years of purchase. $6,638,000,000
Sales Tax Deduction for Vehicle Purchases. The bill provides all taxpayers with a deduction for state and local sales and excise taxes on the purchase of new cars, light truck, recreational vehicles, and motorcycles through 2009. This deduction is subject to a phase-out for taxpayers with adjusted gross income in excess of $125,000 ($250,000 in the case of a joint return). $1,684,000,000
Temporary Suspension of Taxation of Unemployment Benefits. Under current law, all federal unemployment benefits are subject to taxation. The average unemployment benefit is about $300 per month. The proposal temporarily suspends federal income tax on the first $2,400 of unemployment benefits per recipient. Any unemployment benefits over $2,400 will be subject to federal income tax. This proposal is in effect for 2009. $4,740,000,000
Extension of Alternative Minimum Tax Relief for 2009. The bill would provide more than 26 million families with tax relief in 2009 by extending AMT relief for nonrefundable personal credits and increasing the AMT exemption amount to $70,950 for joint filers and $46,700 for individuals. $69,759,000,000
Tax Incentives for Businesses $6,150,000,000
Extension of Bonus Depreciation. Businesses are allowed to recover the cost of capital expenditures over time according to a depreciation schedule. Last year, Congress temporarily allowed businesses to recover the costs of capital expenditures made in 2008 faster than the ordinary depreciation schedule would allow by permitting these businesses to immediately write-off 50% of the cost of depreciable property (e.g., equipment, tractors, wind turbines, solar panels and computers) acquired in 2008 for use in the United States. The bill would extend this temporary benefit for capital expenditures incurred in 2009. $5,074,000,000
Election to Accelerate Recognition of Historic AMT/R&D Credits. Last year, Congress temporarily allowed businesses to accelerate the recognition of a portion of their historic alternative minimum tax or research and development credits in lieu of bonus depreciation. The amount that taxpayers may accelerate is calculated based on the amount that each taxpayer invests in property that would otherwise qualify for bonus depreciation. This amount is capped at 6% of historic AMT and R&D credits or $30 million, whichever is less. The bill would extend this temporary benefit through 2009. $805,000,000
Extension of Enhanced Small Business Expensing. To help small businesses quickly recover the cost of certain capital expenses, small business taxpayers may elect to write-off the cost of these expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Until the end of 2010, small business taxpayers are allowed to write-off up to $125,000 (indexed for inflation) of capital expenditures subject to a phase-out once capital expenditures exceed $500,000 (indexed for inflation). Last year, Congress temporarily increased the amount that small businesses could write-off for capital expenditures incurred in 2008 to $250,000 and increased the phase-out threshold for 2008 to $800,000. The bill would extend these temporary increases for capital expenditures incurred in 2009. $41,000,000
5-Year Carryback of Net Operating Losses for Small Businesses. Under current law, net operating losses ("NOLs") may be carried back to the two taxable years before the year that the loss arises (the "NOL carryback period") and carried forward to each of the succeeding 20 years after the year that the loss arises. For 2008, the bill would extend the maximum NOL carryback period from two years to five years for small businesses with gross receipts of $15 million or less. $947,000,000
Delayed Recognition of Certain Cancellation of Debt Income. Under current law, a taxpayer generally has income where the taxpayer cancels or repurchases its debt for an amount less than its adjusted issue price. The amount of cancellation of debt income ("CODI") is the excess of the old debt’s adjusted issue price over the repurchase price. Certain businesses will be allowed to recognize CODI over 10 years (defer tax on CODI for the first four or five years and recognize this income ratably over the following five years) for specified types of business debt repurchased by the business after Dec. 31, 2008 and before Jan. 1, 2011. $1,622,000,000
Incentives to Hire Unemployed Veterans and Disconnected Youth. Under current law, businesses are allowed to claim a work opportunity tax credit equal to 40% of the first $6,000 of wages paid to employees of one of nine targeted groups. The bill would create two new targeted groups of prospective employees: unemployed veterans and disconnected youth. An individual would qualify as an unemployed veteran if they were discharged or released from active duty from the Armed Forces during the five-year period prior to hiring and received unemployment compensation for more than four weeks during the year before being hired. An individual qualifies as a disconnected youth if they are between the ages of 16 and 25 and have not been regularly employed or attended school in the past 6 months. $231,000,000
Small Business Capital Gains. Current law provides a 50% exclusion for the gain from the sale of certain small business stock held for more than five years. The amount of gain eligible for the exclusion is limited to 10 times the taxpayer’s basis in the stock or $10 million gain from stock in that small business corporation, whichever is greater. This provision is limited to individual investments and not the investments of a corporation. The non-excluded portion is taxed at ordinary income rates or 28%, whichever is less, instead of the lower capital gains rates for individuals. The provision allows a 75% exclusion for individuals on the gain from the sale of certain small business stock held for more than five years. This change is for stock issued after the date of enactment and before Jan. 1, 2011. $829,000,000
Temporary Small Business Estimated Tax Payment Relief. The bill reduces the 2009 required estimated tax payments for certain small businesses. $0
Temporary Reduction of S Corporation Built-In Gains Holding Period from 10 Years to 7 Years. Under current law, if a taxable corporation converts into an S corporation, the conversion is not a taxable event. However, following such a conversion, an S corporation must hold its assets for 10 years to avoid a tax on any built-in gains that existed at the time of the conversion. The bill would temporarily reduce this holding period from 10 years to seven years for sales occurring in 2009 and 2010. $415,000,000
Repeal of Treasury Section 382 Notice. Last year, the Treasury issued Notice 2008-83, which liberalized rules in the tax code that are intended to prevent taxpayers that acquire companies from claiming losses that were incurred by the acquired company prior to the taxpayer’s ownership of the company. The bill would repeal this notice prospectively. -$6,977,000,000
Treatment of Certain Ownership Changes. The bill would clarify the application of section 382 to certain companies restructuring pursuant to the Emergency Economic Stabilization Act of 2008. $3,163,000,000
Business $3,540,000,000
Industrial Development Bonds (IDB). Under current law, certain manufacturing facilities are eligible for tax exempt bond financing. The definition of a manufacturing facility is limited for the purposes of such financing to facilities that are used in the manufacturing or production of tangible personal property. The proposal amends the definition of manufacturing facility to any facility used in the manufacturing, creation or production of tangible or intangible property. Intangible property is any patent, copyright, formula, process, design, pattern, knowhow, format or other similar item. The proposal also clarifies which physical components of a manufacturing facility qualify as ancillary and therefore are subjected to a 25% limitation in the amount of bond issuance used to build or re-construct those components. $203,000,000
Expands assistance programs for service sector workers affected by outsourcing to all countries, including China and India; increases training funds to states by 160% to $575 million per year; and reauthorized all trade assistance programs, which expired in 2007, through Dec. 31, 2010 $1,600,000,000
Prohibits Customs and Border Protection from demanding that lumber, steel and other companies repay duties that CBP collected on Canadian and Mexican imports and then gave to the companies between 2001 and 2005 $90,000,000
Advanced Energy Investment Credit. The proposal establishes a new 30% investment tax credit for facilities engaged in the manufacture of advanced energy property. Credits are available only for projects certified by the Treasury secretary, in consultation with the Energy secretary, through competitive bidding. The Treasury must establish a certification program no later than 180 days after date of enactment and may allocate up to $2.3 billion in credits. Advanced energy property includes technology for the production of renewable energy, energy storage, energy conservation, efficient transmission and distribution of electricity and carbon capture and sequestration. $1,647,000,000
Other Tax Relief $6,858,000,000
New Markets Tax Credit. Under current law, there are $3.5 billion of new markets tax credits (NMTC) available for each of 2008 and 2009. The provision increases the available credits for 2008 to $5 billion and the available credits for 2009 to $5 billion. $815,000,000
Recovery Zone Bonds. The bill would create a new category of tax credit bonds for investment in economic recovery zones. The bill would authorize $10 billion in recovery zone economic development bonds and $15 billion in recovery zone facility bonds. These bonds could be issued during 2009 and 2010. Each state would receive a share of the national allocation based on that state’s job losses in 2008 as a percentage of national job losses in 2008 (each state will receive a minimum allocation of these bonds). These allocations would be sub-allocated to local municipalities. Municipalities receiving an allocation of these bonds would be permitted to use these bonds to invest in infrastructure, job training, education and economic development in areas within the boundaries of the state, city or county (as the case may be) that has significant poverty, unemployment or home foreclosures. $5,371,000,000
Treasury Department Low-Income Housing Grants in Lieu of Tax Credits. Under current law, taxpayers are allowed to claim a low-income housing tax credit for certain investments made in low-income housing. These tax credits help attract private capital to invest in the construction, acquisition or rehabilitation of qualified low-income housing buildings. Current economic conditions have severely undermined the effectiveness of these tax credits. As a result, the bill would allow taxpayers to receive a grant from the Treasury in lieu of tax credits. Under this provision, state housing agencies would receive a grant equal to up to 85% of 40% of the state’s low-income housing tax credit allocation in lieu of the low-income housing tax credits they would have received. The sub-awards are subject to the same requirements (including rent, income and use restrictions on such buildings) as the low-income housing tax credit allocations. The grant program would apply to each state’s 2009 low-income housing tax credit allocation. $69,000,000
Tribal Economic Development Bonds. Under current law, tribal governments are limited in their ability to issue tax-exempt bonds. Projects funded by bonds issued by tribal governments must satisfy an "essential governmental function" requirement. This requirement is not imposed on projects funded by bonds issued by state and local governments and can limit the ability of tribal governments to use tax-exempt bonds for economic development. The bill would temporarily allow tribal governments to issue $2 billion in tax-exempt bonds for projects without this restriction in order to spur economic development on tribal lands. It would also require the Treasury secretary study whether this restriction should be repealed on a permanent basis. $315,000,000
Modify Speed Requirement for High-Speed Rail Exempt Facility Bonds. Under current law, states are allowed to issue private activity bonds for high-speed rail facilities. Under current law, a high-speed rail facility is a facility for the transportation of passengers between metropolitan areas using vehicles that are reasonably expected to operate at speeds in excess of 150 miles per hour between scheduled stops. The bill would allow these bonds to be used to develop rail facilities that are used by such trains. $288,000,000
Infrastructure Financing Tools $19,350,000,000
De Minimis Safe Harbor Exception for Tax-Exempt Interest Expense for Financial Institutions. Under current law, financial institutions are not allowed to take a deduction for the portion of their interest expense that is allocable to such institution’s investments in tax-exempt municipal bonds. In determining the portion of interest expense that is allocable to investments in tax-exempt municipal bonds, the bill would exclude investments in tax-exempt municipal bonds issued during 2009 and 2010 to the extent that these investments constitute less than 2% of the average adjusted bases of all the assets of the financial institution. (*The cost is included in the next provision, Modification of Small Issuer Exception....)$0
Modification of Small Issuer Exception to Tax-Exempt Interest Expense Allocation Rules for Financial Institutions. As described above, financial institutions are not allowed to take a deduction for the portion of their interest expense that is allocable to such institution’s investments in tax-exempt municipal bonds. For purposes of this rule, bonds that are issued by a "qualified small issuers" are not taken into account as investments in tax-exempt municipal bonds. Under current law, a "qualified small issuer" is defined as any issuer that reasonably anticipates that the amount of its tax-exempt obligations (other than certain private activity bonds) will not exceed $10,000,000. The bill would increase this dollar threshold to $30,000,000 when determining whether a tax-exempt obligation issued in 2009 and 2010 qualifies for this small issuer exception. The small issuer exception would also apply to an issue if all of the ultimate borrowers in such issue would separately qualify for the exception. For these purposes, the issuer of a qualified 501(c)(3) bond shall be deemed to be the ultimate borrower on whose behalf a bond was issued. $3,234,000,000
Eliminate Costs Imposed on State and Local Governments by the Alternative Minimum Tax. The alternative minimum tax (AMT) can increase the costs of issuing tax-exempt private activity bonds imposed on state and local governments. Under current law, interest on tax-exempt private activity bonds is generally subject to the AMT. This limits the marketability of these bonds and, therefore, forces state and local governments to issue these bonds at higher interest rates. Last year, Congress excluded one category of private activity bonds (i.e., tax-exempt housing bonds) from the AMT. The bill would exclude the remaining categories of private activity bonds from the AMT if the bond is issued in 2009 or 2010. The bill also allows AMT relief for current refunding of private activity bonds issued after 2003 and refunded during 2009 and 2010. $555,000,000
Delay Application of Withholding Requirement on Certain Governmental Payments for Goods and Services. For payments made after Dec. 31, 2010, the code requires withholding at a 3% rate on certain payments to persons providing property or services made by federal, state and local governments. The withholding is required regardless of whether the government entity making the payment is the recipient of the property or services (those with less than $100 million in annual expenditures for property or services are exempt). Numerous government entities and small businesses have raised concerns about the application of this provision. The provision would delay for one year (through Dec. 31, 2011) the application of the withholding requirement on government payments for goods and services in order to provide time for the Treasury to study the impact of this provision on government entities and other taxpayers. $291,000,000
Qualified School Construction Bonds. The bill creates a new category of tax credit bonds for the construction, rehabilitation or repair of public school facilities or for the acquisition of land on which a public school facility will be constructed. There is a national limitation on the amount of qualified school construction bonds that may be issued by state and local governments of $22 billion ($11 billion allocated initially in 2009 and the remainder allocated in 2010). There is a national limitation on the amount of qualified school construction bonds that may be issued by Indian tribal governments of $400 million ($200 million allocated initially in 2009 and the remainder allocated in 2010). $9,877,000,000
Extension and Increase in Authorization for Qualified Zone Academy Bonds (QZABs). The bill would allow an additional $1.4 billion of QZAB issuing authority to state and local governments in 2009 and 2010, which can be used to finance renovations, equipment purchases, developing course material and training teachers and personnel at a qualified zone academy. In general, a qualified zone academy is any public school (or academic program within a public school) below college level that is located in an empowerment zone or enterprise community and is designed to cooperate with businesses to enhance the academic curriculum and increase graduation and employment rates. QZABs are a form of tax credit bonds which offer the holder a federal tax credit instead of interest. $1,045,000,000
Tax Credit Bond Option for State and Local Governments ("Build America Bonds"). The federal government provides significant financial support to state and local governments through the federal tax exemption for interest on municipal bonds. Both tax credit bonds and tax-exempt bonds provide a subsidy to municipalities by reducing the cash interest payments that a state or local government must make on its debt. Tax credit bonds differ from tax-exempt bonds in two principal ways: interest paid on tax credit bonds is taxable and a portion of the interest paid on tax credit bonds takes the form of a federal tax credit. The federal tax credit offsets a portion of the cash interest payment that the state or local government would otherwise need to make on the borrowing. For 2009 and 2010, the bill would provide state and local governments with the option of issuing a tax credit bond instead of a tax-exempt governmental obligation bond. Because the market for tax credits is currently small given current economic conditions, the bill would allow the state or local government to elect to receive a direct payment from the federal government equal to the subsidy that would have otherwise been delivered through the federal tax credit for bonds. $4,348,000,000
Renewable Energy Tax Credits $19,968,000,000
Long-term Extension and Modification of Renewable Energy Production Tax Credit. The bill would extend the placed-in-service date for wind facilities for three years (through Dec. 31, 2012). The bill would also extend the placed-in-service date for three years (through Dec. 31, 2013) for certain other qualifying facilities: closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy and marine renewable facilities. $13,143,000,000
Temporary Election to Claim the Investment Tax Credit in Lieu of the Production Tax Credit. Under current law, facilities that produce electricity from solar facilities are eligible to take a 30% investment tax credit in the year that the facility is placed in service. Facilities that produce electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, waste-to-energy and marine renewable facilities are eligible for a production tax credit. The production tax credit is payable over a 10-year period. Because of current market conditions, it is difficult for many renewable projects to find financing due to the uncertain future tax positions of potential investors in these projects. The bill would allow facilities to elect to claim the investment tax credit in lieu of the production tax credit. $285,000,000
Repeal Subsidized Energy Financing Limitation on the Investment Tax Credit. Under current law, the investment tax credit must be reduced if the property qualifying for the investment tax credit is also financed with industrial development bonds or through any other federal, state, or local subsidized financing program. The bill would repeal this subsidized energy financing limitation on the investment tax credit in order to allow businesses and individuals to qualify for the full amount of the investment tax credit even if such property is financed with industrial development bonds or through any other subsidized energy financing. (*Cost of this is included in the next provision, Removal of Dollar Limitations on Certain Energy Credits)$0
Removal of Dollar Limitations on Certain Energy Credits. Under current law, businesses are allowed to claim a 30% tax credit for qualified small wind energy property (capped at $4,000). Individuals are allowed to claim a 30% tax credit for qualified solar water heating property (capped at $2,000), qualified small wind energy property (capped at $500 per kilowatt of capacity, up to $4,000), and qualified geothermal heat pumps (capped at $2,000). The bill would repeal the individual dollar caps. As a result, each of these properties would be eligible for an uncapped 30% credit. $872,000,000
Clean Renewable Energy Bonds. The bill authorizes an additional $1.6 billion of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, marine renewable and trash combustion facilities. This $1.6 billion authorization will be subdivided into thirds: 1/3 will be available for qualifying projects of state/local/tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives. $578,000,000
Qualified Energy Conservation Bonds. The bill authorizes an addition $2.4 billion of qualified energy conservation bonds to finance state, municipal and tribal government programs and initiatives designed to reduce greenhouse gas emissions. The bill would also clarify that qualified energy conservation bonds may be issued to make loans and grants for capital expenditures to implement green community programs. The bill also clarifies that qualified energy conservation bonds may be used for programs in which utilities provide ratepayers with energy-efficient property and recoup the costs of that property over an extended period of time. $803,000,000
Tax Credits for Energy-Efficient Improvements to Existing Homes. The bill would extend the tax credits for improvements to energy-efficient existing homes through 2010. Under current law, individuals are allowed a tax credit equal to 10% of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during the year. This tax credit is capped at $50 for any advanced main air circulating fan, $150 for any qualified natural gas, propane, oil furnace or hot water boiler and $300 for any item of energy-efficient building property. For 2009 and 2010, the bill would increase the amount of the tax credit to 30% of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements during the year. The bill would also eliminate the property-by-property dollar caps on this tax credit and provide an aggregate $1,500 cap on all property qualifying for the credit. The bill would update the energy-efficiency standards of the property qualifying for the credit. $2,034,000,000
Tax Credits for Alternative Refueling Property. The alternative refueling property credit provides a tax credit to gas stations that install alternative fuel pumps, such as fuel pumps that dispense E85 fuel, electricity, hydrogen and natural gas. For 2009 and 2010, the bill would increase the 30% alternative refueling property credit for businesses (capped at $30,000) to 50% (capped at $50,000). Hydrogen refueling pumps would remain at a 30% credit percentage; however, the cap for hydrogen refueling pumps will be increased to $200,000. In addition, the bill would increase the 30% alternative refueling property credit for individuals (capped at $1,000) to 50% (capped at $2,000). $54,000,000
Plug-in Electric Drive Vehicle Credit. The bill modifies and increases a tax credit passed into law at the end of last Congress for plug-in electric drive vehicles placed in service during the year. The base amount of the credit is $2,500. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit is increased by $417, plus another $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 16 kilowatt hours. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter in which the manufacturer records its 200,000th sale of a plug-in electric drive vehicle. The credit is reduced in following calendar quarters. The credit is allowed against the alternative minimum tax (AMT). The bill also restores and updates the electric vehicle credit for plug-in electric vehicles that would not otherwise qualify for the larger plug-in electric drive vehicle credit and provides a tax credit for plug-in electric drive conversion kits. $2,002,000,000
Addition of Permanent Sequestration Requirement to CO2 Capture Tax Credit. Last year, Congress provided a $10 credit per ton for the first 75 million metric tons of carbon dioxide captured and transported from an industrial source for use in enhanced oil recovery and $20 credit per ton for carbon dioxide captured and transported from an industrial source for permanent storage in a geologic formation. Facilities were required to capture at least 500,000 metric tons of carbon dioxide per year to qualify. The bill would require that any taxpayer claiming the $10 credit per ton for carbon dioxide captured and transported for use in enhanced oil recovery must also ensure that such carbon dioxide is permanently stored in a geologic formation. $0
Parity for Transit Benefits. Current law provides a tax-free fringe benefit employers can provide to employees for transit and parking. Those benefits are set at different dollar amounts. This provision would equalize the tax-free benefit employers can provide for transit and parking. The proposal sets both the parking and transit benefits at $230 a month for 2009, indexes them equally for 2010 and clarifies that certain transit benefits apply to federal employees. $192,000,000
Treasury Department Energy Grants in Lieu of Tax Credits. Under current law, taxpayers are allowed to claim a production tax credit for electricity produced by certain renewable energy facilities and an investment tax credit for certain renewable energy property. These tax credits help attract private capital to invest in renewable energy projects. Economic conditions have undermined the effectiveness of these tax credits. As a result, the bill would allow taxpayers to receive a grant from the Treasury Department in lieu of tax credits. This grant will operate like the current-law investment tax credit. The Treasury Department will issue a grant in an amount equal to 30% of the cost of the renewable energy facility within 60 days of the facility being placed in service or, if later, within 60 days of receiving an application for such grant. $5,000,000
Aid to State and Local Governments $95,136,000,000
One-time grants to encourage states to increase unemployment coverage; also for administrative costs $2,975,000,000
Temporarily waives interest payments on loans received by state unemployment trust funds through Dec. 31, 2010 $1,100,000,000
Extends unemployment for 13 weeks to railroad workers not included in the federal/state unemployment system and provide aid to states for the administration of this program $159,000,000
Creates a capped, temporary Temporary Assistance for Needy Families fund to help states during the recession $2,418,000,000
Provides additional aid to states with high population growth and increased poverty $319,000,000
Repeals cuts to child support enforcement $1,000,000,000
Medicaid increase for states $86,600,000,000
Increases state hospital payments by 2.5% $460,000,000
Extends a moratorium on Medicaid regulations for case management, provider taxes and school-based administration and transportation services through June 30, 2009 $105,000,000
Health Care $20,352,000,000
Eliminates cost-sharing for American Indians and Alaska natives in Medicaid, protects tribal property and maintains access to Indian health facilities $134,000,000
Temporarily applied Medicaid prompt payment requirements for nursing facilities and hospitals $680,000,000
Health information technology $19,200,000,000
Medicare payments for teaching hospitals $191,000,000
Medicare payments for hospices $134,000,000
Medicare payments to long-term care hospitals $13,000,000
Aid to People Affected by the Economic Downturn $62,310,000,000
Extension of Emergency Unemployment Compensation. Through Dec. 31, 2009, the bill continues the emergency unemployment compensation program, which provides up to 33 weeks of extended unemployment benefits to workers exhausting their regular benefits. $26,960,000,000
Increases weekly unemployment benefits by an additional $25 through 2009 $8,800,000,000
Extends transitional medical assistance from June 30, 2009 to Dec. 31, 2010 $1,300,000,000
Extends the qualified individual program, which assists low-income individuals with Medicare Part B premiums through Dec. 31, 2010 $550,000,000
Premium subsidies for COBRA continuation for unemployed workers $24,700,000,000