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CCH can assist you with stories, including interviews with CCH subject experts.
Also, the 2009
CCH Whole Ball of Tax is available in print. Please
contact:
Leslie Bonacum
(847) 267-7153
mediahelp@cch.com
Neil Allen
(847) 267-2179
neil.allen@wolterskluwer.com
Visit the CCH Whole Ball of Tax site often as new releases and other updates will be posted throughout the tax season.
CCH provides special CCH Tax Briefings on key topics at: CCHGroup.com/Legislation/Briefings.
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2009 CCH Whole Ball of Tax
CCH Reviews 2008 Tax Legislation
(RIVERWOODS, ILL., January 2009) – Congress managed to make more than 500 changes to the nation’s tax laws in 2008, according to CCH, a Wolters Kluwer business and a leading provider of tax, accounting and audit information, software and services (CCHGroup.com).
With more changes promised by the incoming administration, here is a look back at provisions that impact individuals in five major tax acts of last year. Additional changes focused on farmers, low-income housing, real estate investment trusts and energy-related businesses.
Economic Stimulus Act of 2008
- Provided economic stimulus rebates of up to $600 for singles, $1,200 for joint filers, $300 for eligible children based on 2007 tax information.
Heroes Earnings Assistance and Relief Tax Act
- Allowed members of the military to file jointly and receive an economic stimulus payment as long as one spouse has a valid Social Security number.
- Made permanent the ability of military personnel to treat tax-free combat pay as earned income solely for purposes of maximizing the Earned Income Credit.
- Made permanent ability of reservists to take penalty-free withdrawals from IRAs, 401(k)s and other arrangements and added penalty-free access to unused amounts from flexible spending arrangements (FSAs) sponsored by their employer.
- Allowed individuals receiving military death benefits to disregard the Roth IRA dollar amount limitations and start a Roth IRA with the full amount of these death benefits. The same treatment generally applies to contributions of military death benefits to Coverdell Educational Savings Accounts (ESAs).
- Enhanced survivor benefits of military personnel covered by employer-sponsored qualified plans.
- Clarified that state bonuses and similar payments based on service in a combat zone are excludable from the recipient’s gross income.
Housing Assistance Tax Act of 2008
- Gave first-time homebuyers nationwide a temporary refundable tax credit equal to 10 percent of the purchase price of a home, up to $7,500 ($3,750 for married individuals filing separately) effective for homes purchased on or after April 9, 2008, and before July 1, 2009. The credit must be repaid in equal installments over 15 years.
- Gave nonitemizers a limited deduction in 2008 for state and local real property taxes by increasing the amount of their standard deduction by the amount of real property taxes paid during the year or $500 ($1,000 for a married couple filing jointly), whichever is less.
- Provided that appreciation attributable to periods after 2008 during which a residence was used as a vacation home or as rental property before its use as the principal residence will not be eligible for the principal residence exclusion.
Emergency Economic Stabilization Act
- For the 2008 tax year, set the AMT exemption amounts at $69,950 for married couples filing jointly and surviving spouses, $46,200 for single taxpayers and heads of household and $34,975 for married couples filing separately.
- Extended a temporary rule for cancellation of indebtedness income from the end of 2009 through 2012.
- Provided relief to high-tech workers and others who were left holding worthless stock options but a large tax bill based on AMT calculations when the tech industry collapsed by abating AMT liability stemming from the exercise of incentive stock options (ISOs) before 2008, effective for any unpaid tax liability on the law’s date of enactment. Interest and penalties on the unpaid amounts would also be abated.
- Made the state and local sales tax deduction retroactive for 2008 and extended it for two years through December 31, 2009.
- Extended through December 31, 2009, the above-the-line higher education tuition deduction.
- Extended the additional standard deduction for real property taxes for non-itemizers – originally set to expire at the end of 2008 – through 2009.
- Allowed teachers and other education professionals to deduct, above-the-line, up to $250 of certain out-of-pocket classroom expenses in 2008 and 2009.
- Permitted taxpayers to make tax-free distributions from IRAs for charitable purposes through December 31, 2009.
- Enhanced the child tax credit by making more of it refundable.
- Extended the residential energy efficient property credit through December 31, 2016, along with adding incentives for residential small wind investment and geothermal heat pumps and authorizing taxpayers to use the credit to offset AMT.
- Reinstated the residential energy property credit for property placed in service in 2009.
- Extended the credit for producing electricity from qualified wind facilities through December 31, 2009, and the credits for producing electricity through biomass and other qualifying renewable sources through September 30, 2011. The credit for solar energy, fuel cell and microturbine property is extended through December 31, 2016.
- Extended the exclusion of employer-provided transportation fringe benefits to employees who commute by bicycle. The exclusion amount is $20 per month. This treatment is effective for tax years beginning after December 31, 2008.
- Provided a higher standard mileage rate for charitable use of vehicles in the Midwestern Disaster Area.
Worker, Retiree and Employer Recovery Act
- Suspended required minimum distributions from qualified retirement accounts for 2009.
- Clarified that all qualified plans must permit rollovers out of the plan for nonspouse beneficiaries.
- Provided relief to qualified plans facing difficulties meeting funding and other requirements in the face of depressed financial markets.
About CCH, a Wolters Kluwer business
CCH, a Wolters Kluwer business (CCHGroup.com) is a leading provider of tax, accounting and audit information, software and services. It has served tax, accounting and business professionals since 1913. Among its market-leading products are The ProSystem fx® Office, CCH® TeamMate, CorpSystem®, CCH® Tax Research NetWork™, Accounting Research Manager® and the U.S. Master Tax Guide®. CCH is based in Riverwoods, Ill.
Wolters Kluwer is a leading global information services and publishing company. The company provides products and services globally for professionals in the health, tax, accounting, corporate, financial services, legal and regulatory sectors. Wolters Kluwer has annual revenues (2007) of €3.4 billion ($4.8 billion), maintains operations in over 33 countries across Europe, North America and Asia Pacific and employs approximately 19,500 people worldwide. Wolters Kluwer is headquartered in Amsterdam, the Netherlands. For more information, visit www.wolterskluwer.com.
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nb-09-20
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