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Recent Legislation to Provide Economic Stimulus

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 temporarily extended various tax provisions scheduled to expire at the end of 2010 and replaced the expiring Making Work Pay tax credit with a payroll tax cut. In particular, the act extended all 2001 and 2003 individual income tax cuts as well as the EITC and child tax credit provisions and the American Opportunity Tax Credit for higher education created by the 2009 stimulus act. It also reduced payroll taxes on workers by 2 percentage points for one year and relaxed the estate tax by raising the exclusion and lowering the tax rate for two years.

The American Recovery and Reinvestment Act of 2009 (ARRA)

The American Recovery and Reinvestment Act temporarily reduced both individual and corporate income taxes in an attempt to stimulate the American economy. The act had four main goals: 1) give households more after-tax income to spend; 2) encourage consumers to purchase homes and new cars; 3) cut taxes for struggling businesses; and 4) promote investment. Major tax provisions of the ARRA included the Making Work Pay tax credit, an increase in the earned income tax credit (EITC), expansion of the Child Tax Credit (CTC), and the American Opportunity tax credit to help pay for higher education.

The Economic Stimulus Act of 2008

The Economic Stimulus Act of 2008 had three main parts: 1) an individual tax rebate, 2) increased limits on expensing investment costs, and 3) accelerated depreciation of some investments.

Additional Resources on Economic Stimulus