Tax Credits for 2009

February 9, 2010

Looking for tax credits? Here’s a list of some of the more popular tax credits for 2009, and who qualifies for them:

First Time Homebuyer Earned Income Tax
The first time homebuyer’s tax credit was part of the economic recovery plan in 2009. It allows first time homebuyers who purchased homes in 2009 to take a tax credit of 10% off the purchase price of their home, with a maximum deduction of $8000.00. To qualify as a first time homebuyer, you cannot have owned a home anytime during the last three years that you used as a primary residence. The home you are purchasing must be for the use as your primary residence and be used as such for the next three years.

Prior to November 6 to qualify you must also have a modified adjusted income as an individual less than $75,000 or as a couple less than $150,000. If you purchased the home after November 6 your modified adjusted income must be as an individual less than $125,000 or less than $225,000 for a couple. For homes purchased after November 6 the other restrictions include that the home you bought must be less than $800,000. To qualify the home you purchased could not have been bought from a close relative. Homebuyers must also be over eighteen years of age.

Vehicle Tax Credit

The car tax credit is also part of the stimulus package. If you purchased a new vehicle between February 17 and December 31 you qualify. All vehicles including cars, trucks, motorcycles and even motor homes qualify, but only if they are brand new. You can get the amount you paid in tax on the vehicle back in a tax credit. To qualify you must have an income as an individual lower than approximately 135,000 and lower than 260,000 approximately for couples. The vehicle you purchase must also be $49,500 or less to qualify for a full credit. If the vehicle is more than this amount, you can only deduct the tax up to $49.500. You will receive your credit when filing your income tax return for 2009. You do not need to itemize to receive the credit and instead of taking off your tax due, it reduces your income. For some this might not add up to much savings.

Adoption Tax Credit

For anyone who adopted a child in 2009, expenses accumulated during the adoption process may be eligible for a tax credit. Adoption expenses eligible for the tax credit are all reasonable and necessary adoption fees including court fees, cost for your attorney, travel expenses including meals and lodging and any other fees that are directly related to the adoption. Costs not eligible include any fees that you have been reimbursed for through your employer for example. To qualify the adoptee must be under 18 years of age. The maximum tax credit that can be earned is $12,150 per child.

Social Security Tax Credit

For individuals and couples collecting social security, you are entitled to a tax credit in 2009 of $250.00 as an individual or $500.00 as a couple. Basically, every individual who collects social security is eligible for this $250.00 credit, even if you have other income.

Government Retiree Credit

Government retirees who do not collect social security are also entitled to a $250.00 tax credit. Every retired federal employee not receiving social security will receive the credit.

American Opportunity Tax Credit

The American Opportunity tax credit has replaced the Hope Credit and allows individuals attending college to receive at tax credit for college related expenses. For the first four years of post secondary education a tax credit can be earned in the amount of up to $2500.00 per year. Tuition, room and board, text books and other necessary supplies qualify for the tax credit. The tax credit is calculated on 100% of the first $2000.00 paid and 25% of the next $2000.00 paid. To be eligible gross income cannot be more than $80,000 for an individual and $160,000 for couples filing jointly.

Energy Efficient Tax Credit

This tax credit is for qualifying purchases of energy efficient home products including hot water heaters, insulation, doors, windows and skylights. Purchasers can earn up to 30% of the cost in a tax credit. The maximum credit earned is $1500 and can not include installation of such products. Each product must meet certain energy efficient criteria to qualify.

This last one’s not a tax credit; it’s a tax deduction that you probably already had applied to your paycheck in 2009. However, it could be worth up to $800 so it’s worth double checking to see if it your employer handled it with your paycheck.

Making Work Pay Deduction

The Making Work Pay tax deduction for 2009 is also a stimulus plan tax deduction. The deduction is for 6.2% of your earned income up to $400.00 for individuals and $800.00 for couples. Most people have already received this deduction in their pay checks. Those who are self employed will need to claim the deduction when they file their 2009 income tax return. To be eligible for the full credit individuals need to have made less than $75,000 and couples less than $150,000.


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Debbie Dragon is a full-time writer who has been covering personal finance online for almost 9 years.

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6 Responses to Tax Credits for 2009

  • larry rose

    regarding the government retiree tax credit of $250, is this ONLY available to federal retirees? what about city retirees who do not collect social security?

  • Daddy Paul

    This is a nice list. I am a lot happier after reading this post. I would like to mention one more credit.
    If your income limits must be below $27,751 single or $55,501 married please take advantage of the savers tax credit. This is a good deal for those who qualify.


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