Washington, DC--Congressman Eliot Engel (D-NY-17) urged New Yorkers to take advantage of the 25 different tax cuts in the Recovery Act – part of the more than $800 billion in tax cuts for working families and small businesses that this Congress passed since last year. If you missed out on any of these tax cuts, there is still time to amend your 2009 return to get the full benefits of the Recovery Act.

“Most people don’t realize that tax cuts are the biggest individual piece of the Recovery Act,” said Rep. Engel, a senior member of the House Energy and Commerce Committee. “President Obama and Congress gave 95% of working Americans one of the largest tax cuts in history through the Recovery Act. As families mail in or e-file their 2009 income taxes today, you may be qualified for a series of other generous tax cuts – for example, you could save money for attending college, making energy-saving home improvements, purchasing a home for the first time, or buying a new car.”

Taxpayers in the Bronx, and Rockland and Westchester Counties, and across the country, have been able to claim a variety of benefits on their 2009 tax returns, including:

• The Making Work Pay tax credit – Ninety-five percent of working families are already receiving the Recovery Act’s Making Work Pay tax credit of $400 for an individual or $800 for married couples filing jointly in their 2009 paychecks – and will continue to see these benefits in 2010. In the Bronx, Rockland and Westchester Counties, 227,000 families are benefiting from the Making Work Pay tax credit. And $3.4 billion was put in the hands of New York consumers thanks to the Making Work Pay tax credit. The credit is worth 6.2 percent of an individual's earned income, with a maximum credit of $400 per person. The credit is reduced by two percent of the amount of income in excess of the $75,000, completely phased out for individuals making $95,000 or more.
• Tax credits for college expenses – Families and students are eligible for up to $2,500 in tax savings under the American Opportunity Credit as well as enhanced benefits under 529 college savings plans, which helps families and students pay for college expenses. More than four million additional students will be able to attend college thanks to this tax credit. Almost 500,000 New York families would benefit from college expense-based tax credits, and almost 300,000 New York students would now benefit for federal college tax credits thanks to the Recovery Act.
• The First Time Homebuyers tax credit – First time homebuyers can get a credit of up to $8,000 for homes purchased by April 30, 2010 under the First Time Homebuyer tax credit. In New York, 58,787 households have already taken advantage of the First Time Homebuyers tax credit. Rep. Engel introduced legislation (H.R. 4701) to fix inequalities on the Homebuyers Tax Credit by providing equal treatment for married couples. Under current law, married partners may be ineligible for the credits unless both qualify for the same tax credit, either first time homebuyer or long time homebuyer. Rep. Engel’s legislation would amend the laws to loosen the restrictions and provide fairness for these couples.
• Tax credits for energy efficient renovations – Taxpayers are eligible for up to $1,500 in tax credits for making energy-efficient improvements to their homes, such as adding insulation and installing energy efficient windows. In addition, $79.5 million was given for green jobs to be created in New York for facilities that produce renewable electricity.
• The vehicle sales tax deduction – Taxpayers can deduct the state and local sales taxes they paid for new vehicles purchased from Feb. 17, 2009 through Dec. 31, 2009 under the vehicle sales tax deduction. Also, the Recovery Act enabled over 54,000 people to be employed in new car dealerships in New York State.
• Tax-free unemployment benefits – Thanks to the Recovery Act, individuals who received unemployment insurance in 2009 do not have to pay taxes on the first $2,400 of such earnings. Over 850,000 New Yorkers have benefitted from this.

Unlike the Bush tax cuts which focused on the wealthy, this Congress has enacted more than $800 billion in broad-based tax cuts for working American families. Bruce Bartlett, President Reagan’s domestic policy advisor, noted that “federal taxes are very considerably lower by every measure since Obama became president.” In addition, William Gale, head of the Tax Policy Center at the Brookings Institution said that federal taxes are “at their lowest levels in 60 years.”

“When President Obama took office, our economy was in freefall, losing nearly 800,000 jobs a month, cutting into Americans’ retirement savings and freezing lending to small businesses,” said Rep. Engel. “We passed the Recovery Act, which has saved and created more than two million jobs in the first year of a two-year effort. The Recovery Act tax cuts are easing the burden on American families and small businesses. The rate of job losses has been reduced to a trickle instead of a cascade, including a net job gain nationally last month. Despite the apocalyptic rhetoric from opponents, the Recovery Act has worked, the economy is recovering and real American families have benefitted in both the short and long terms.”