FACTBOX - Tax details of US stimulus plan released

Feb 12 (Reuters) - Details of the tax provisions contained
in the $789 billion U.S. economic stimulus package negotiated
between the House of Representatives and the Senate have been
released.
The bill provides for $282 billion in tax cuts. Senate
Majority Leader Harry Reid said the Senate would vote on Friday
on the package that President Barack Obama wants quickly to
boost the struggling economy. The House is also scheduled to
take it up on Friday.
Here are some of the major tax provisions in the bill:

FOR WORKERS, CONSUMERS AND RETIREES
* A "making work pay" refundable tax credit championed by
President Barack Obama of up to $400 per individual and $800
for couples in 2009 and 2010. It is calculated at a rate of 6.2
percent of earned income and is phased out for individuals with
adjusted incomes over $75,000 and couples with incomes over
$150,000.
* A one-time payment of $250 to Social Security
beneficiaries, railroad retirees and veterans receiving
benefits from the Veterans Affairs department. State government
retirees not eligible for Social Security would also get the
$250 payment.
* Increases the earned income tax credit for low-income
workers with three or more children.
* Increases eligibility for the refundable child tax credit
to more low-income workers. The bill reduces the income floor
to $3,000 in 2009 and 2010 from the current floor of $8,500.
* Provides a new $2,500 tax credit for college education
expenses. The credit phases out for individuals earning more
than $80,000 and couples with incomes over $160,000.
* Provides an $8,000 tax credit for first-time home buyers
for homes purchased between Jan. 1 and Dec. 1, 2009. The tax
credit phases out for individuals earning more than $75,000 and
couples earning more than $150,000.
* Provides temporary relief from the alternative minimum
tax for millions of middle-class taxpayers who otherwise would
be ensnared by the tax originally meant for the very wealthy.

FOR BUSINESSES
* Allows small businesses with gross receipts of up to $15
million to write off 2008 losses against five previous tax
years. Current laws allows a two-year carryback of losses.
Businesses will also be allowed to immediately write off
more of their investments in computers and other equipment.
* Businesses that repurchase debt at a lower amount than
when it was issued will be able to defer taxes on it. Usually
reduced or canceled debt is treated as income and taxed. The
break applies to debt repurchased adjusted after Dec. 31, 2008,
and before Jan. 1, 2011.
* Gives a tax break on capital gains from the sale of stock
held in a small business for more than five years.
* The bill raises about $7 billion in revenues by repealing
a Treasury Department decision last year to liberalize rules
that were intended to prevent companies in a merger from taking
huge tax breaks on losses of firms they were acquiring.

FOR STATE AND LOCAL GOVERNMENTS
* Creates a new category of tax-preferred bonds for
investment in economic recovery zones for job training,
education and economic development.
* Creates a new category of tax-preferred bonds for the
construction, and repair of public schools and the purchase of
land for schools.
* Creates a federal subsidy for state and local governments
offering bonds that give investors credits against their
federal taxes in place of interest payments.

FOR RENEWABLE ENERGY
* Extends tax breaks for wind facilities and other
renewable energy facilities and provides other tax incentives
to encourage development of renewable energy facilities.
* Authorizes an additional $1.6 billion of new clean
renewable energy bonds as well as $2.4 billion of energy
conservation bonds to finance state and local government
projects to reduce greenhouse gas emissions.
* Extends tax credits for energy-efficient improvements to
existing homes.
* Provides a tax credit for purchase of "plug-in" electric
vehicles of at least $2,500. The credit is increased depending
on the battery capacity of the car purchased.
* Provides a new 30 percent investment tax credit for
facilities engaged in producing renewable energy technology and
conservation.
(Editing by Peter Cooney)
((Donna.M.Smith@ThomsonReuters.com;Reuters Messaging:
donna.smith.reuters.com@reuters.net))
Keywords: USA STIMULUS/TAXES

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Keywords: USA STIMULUS/TAXES

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