I received a very informative newsletter from my accountant's office today, and I thought I would pick out a few highlights of the AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 a.k.a - the Bail Out.
Personally, I was a bit surprised and I have to admit, impressed, with some of the credits that have been increased or extended for both, individuals and businesses.
Here are a few of the highlights that are beneficial (hopefully) to current and future homeowners:
First-Time Homebuyer Tax Credit
The First-Time Homebuyer Tax Credit increases to a maximum of $8,000, eliminating any payback after living in the home 36 months. This will apply to first-time homebuyer purchases of a principal residence from January 1, 2009 through December 31, 2009.
The credit begins to phase-out when AGI exceeds $75,000 ($150,000 for joint filers).
This applies only to homes purchased after December 31, 2008. Homes purchased earlier than 2009 will be governed by the original first-time homebuyer credit with full payback with a maximum credit of $7,500.
Residential Energy Property Credit - This is great for those looking to improve their current homes, or for those who are purchasing a bit of a fixer-upper:
The agreement increases the residential energy property tax credit from 10% to 30%, and raises the maximum cap to an aggregate of $1,500 for installations during 2009 and 2010. If you made qualifying improvement in 2009 - keep track of this!
Eligible improvements include
- insulation,
- exterior windows and doors,
- central air conditioners,
- natural gas, propane or oil water heaters or furnaces,
- hot water boilers,
- electric heat pumps & water heaters,
- metal roofs,
- and advanced main air circulating fans.
Pre-2008 credits are not counted toward the $1,500 maximum.
Residential Energy Efficient Property Credit - GO GREEN, IT PAYS OFF!
The credit cap is removed for residential energy efficient solar hot water property, geothermal heat pumps, and wind energy property!
FOR BUSINESSES WHO ARE LOOKING TO EXPAND AND BUILD NEW OPERATIONS - CONSIDER A "KOZ":
SALES AND USE TAX EXEMPTION FOR KEYSTONE OPPORTUNITY ZONE BUSINESSES
Pennsylvania has expanded the sales and use tax exemption for businesses constructing in a Keystone Opportunity Zone. According to Pennsylvania Senate Bill 1412, a business may purchase services or tangible personal property, other than motor vehicles, exempt from sales and use tax if these items are purchased for the exclusive use, consumption, or utilization at a facility located within a Keystone Opportunity Zone (KOZ) or a Keystone Opportunity Expansion Zone (KOEZ).
In June 2008, the Pennsylvania Senate signed an amended Senate Bill 1412 to include certain purchases of services or tangible personal property by construction contractors for use in a construction contract with a qualified KOZ business, landowner, or lessee. However, this bill was not effective until September 2008. In order for a qualified contractor to take advantage of this exemption, the construction contract with the eligible KOZ business, landowner, or lessee must be dated on or after September 8, 2008. This expansion of the sales and use tax exemption will apply to any qualified purchases made by a general contractor or subcontractor.
Keystone Opportunity Zones and Keystone Opportunity Expansion Zones are selected underdeveloped and underutilized commercial or industrial properties which provide little to no tax burden to businesses who develop in those areas. These zones were enacted to help promote economic growth and development in those selected areas. There are currently 12 Keystone Opportunity Zones located in Pennsylvania.
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