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Introduction
We are faced with the worst economic crisis since the Great Depression. Help is on the way, thanks to the American Recovery and Reinvestment Act, approved by the Ways and Means Committee that I chair. The $787-billion package, approved last month, cuts payroll taxes and increases unemployment benefits and food stamps to keep families going during tough times. The bill will also provide funding to help state and local governments keep people in their jobs.

The bill protects workers from the Alternative Minimum Tax, and increases the amount covered under the Earned Income Tax Credit (EITC), as well as the Child Credit.

Health is another priority being addressed. Earlier this year, legislation was enacted that extended health care benefits to 11 million children, and the Recovery package will help maintain insurance for those who’ve lost their jobs.

Our tax newsletter is meant to inform you of important benefits available to you when you file your taxes. My office has been working with the IRS and community organizations to provide access to free quality tax help.

IMPORTANT TAX TIPS

DON'T throw away money by getting a Refund Application Loan (RAL).

DO File your return electronically.

DO File a return even if you don’t think you need to.

Be sure to sign and date your return, and always keep a copy of your return for your records.

It’s not too late to claim tax refunds for past years.

The last day to file your 2008 federal tax return on time is Wed., April 15, 2009.

MANHATTAN TAXPAYER ASSISTANCE CENTERS

East Harlem/Harlem/Washington Heights
Internal Revenue Service, 55 West 125th Street, Ground Floor
New York, NY 10027

Midtown
Internal Revenue Service, 110 West 44th Street, 2nd Floor
New York, NY 10036

Recovery Benefits You Can Claim NOW

Quick Relief. A one-time payment of $250 to seniors, disabled veterans, SSI recipients, and certain state and federal pensioners starting in May;
Payroll Tax Cut. A reduction of up to $400 - $800 a year in payroll taxes through the Making Work Pay Tax Cut;
Homebuyers Tax Credit. An increase of up to $8,000 for homes purchased in 2009;
Increases Food Stamp Benefits. An average of $63 a month for a family of three, while also providing more money to food pantries and other assistance programs;
Unemployment Benefits. A $25 increase per week, a benefit extension of an additional 33 weeks, and 65% of healthcare payments for nine months, even in cases when coverage was originally turned down.


Tax Benefits for Next Year's Returns

Benefits for Individuals
Making Work Pay Tax Cut. Provides a tax credit for those who do not receive the full Making Work Pay Tax Credit or any portion of the credit through withholding reductions.

Sales Tax Deduction for Vehicle Purchases. Provides a tax deduction for state and local sales taxes paid on the purchase of new cars, including light trucks and SUVs.

Benefits for Families
Child Tax Credit. Cuts taxes for the families of nearly 16 million children through an expansion of the Child Tax Credit.

Earned Income Tax Credit. Expands the Earned Income Tax Credit by providing tax relief to families with three or more children and increasing marriage penalty relief.

A New, More Generous College Tax Credit. Helps more than million additional students attend college with a new, $2,500 tax credit for families, which is partially refundable.

Alternative Minimum Tax. Protects 26 million middle-class families from being hit by the Alternative Minimum Tax in 2009.

Helping the Unemployed
Unemployment Benefits. Temporarily suspends the taxation of unemployment benefits (up to $2,400 of benefits) for 2009.

Jobs for Unemployed Veterans and Disconnected Youth. Provides tax credits for hiring and funding for job training programs that target dislocated workers, veterans, the disabled and youth.

Helping Small Businesses
Bonus Depreciation. Helps businesses quickly recover costs of new capital investments by extending the increased bonus depreciation for businesses in new plants and equipment in 2009.

Small Business Expensing. Extends enhanced small business expensing, which doubles the amount small businesses can immediately write off their taxes for capital investments and
purchases of new equipment made in 2009 from $125,000 to $250,000.

Small Business Loss Carrybacks. Increases cash flow by providing a 5-year carryback of 2008 net operating losses for small businesses.

Spurring Investments in Small Businesses. Spurs investments in small businesses by cutting the capital gains tax on investors in small businesses who buy stock (in the next two years) and hold it for more than five years.

3% Government Withholding. Delays the mandate that federal, state, and local governments withhold 3 percent of payments to businesses for goods and services, which is supported by the
National Small Business Association.

IF YOU LIVE IN PUBLIC HOUSING, the Stimulus bill will mean that help is on the way. The stimulus provides much-needed funds for the New York City Housing Authority, which will receive over $425 million to undertake repairs and maintenance at its buildings throughout the City. These funds will make up for the shortage of funds that prevented the Housing Authority from doing repairs on elevators, plumbing, heating, and other needs.

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