| Rep. Rahall Press Release
Lower Taxes: Building Futures for Families, Jobs and Businesses
Lower taxes, tax cuts, and tax breaks help build futures for our families, by creating jobs, and benefiting small businesses. The savings can be significant in the wide range of tax benefits Congress has passed in the last year such as the expanded Earned Income Tax Credit, the Making Work Pay Tax Cut, which was in the Recovery Act, and the $1.7 trillion in tax cuts for Americans over ten years in the FY2010 budget.
The expanded Earned Income Tax Credit could make a significant financial difference for thousands of households in southern West Virginia, particularly as families struggle during the economic downturn. Currently the IRS estimates that 20 to 25 percent of EITC-eligible workers, or 5-7 million people, fail to claim this tax benefit each year. In order to qualify for the expanded EITC you will need to be a working individual with an income of less than $43,279 for a single person or $48,279 if you are married and filing jointly. In southern West Virginia in 2008; 52,829 West Virginians received the EITC for a total of $98,243,737, with West Virginians who filed receiving an average credit of $1,800.
The Making Work Pay Tax Cut credit, a refundable tax credit of up to $400 per worker or $800 per couple filing jointly, provides over 110 million working families the tax relief they need right now and is being distributed largely by reducing tax withholding from workers' paychecks.
In addition the Child Tax Credit cuts taxes for the families of more than 16 million children through an expansion of the child tax credit. This provides a new tax cut for more than 6 million children, and increases the existing credit for more than 10 million children.
Today education costs continue to mount, which is why the American Opportunity College Tax Credit is available to help more than 4 million additional students attend college with a new, $2,500 tax credit for families.
This past year Congress also voted to extend and expand the Homebuyers tax credit which is available to provide assistance to the struggling housing market and the millions of small businesses involved with homebuilding and construction. Before the recession, building new homes accounted for a significant part of our gross national product, and this legislation amended the Internal Revenue Code (IRC) and replaced the current tax credit for first time homebuyers to allow for a one-time credit for 10%- up to $15,000 - of the purchase price of a principal residence. Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
There have also been significant business tax incentives put in place to create jobs such as the small business expensing provision, spurring investments by extending expensing, and doubling the amount businesses can immediately write off their taxes for capital investments and purchases of new equipment within a certain cost range made in 2009.
In addition legislation passed that helps small businesses by allowing investors to exclude 75% of the gain from the sale of small business stock that is purchased and held for at least 5 years. It also allows small businesses which are looking to reduce their debt burdens by delaying taxes on discharged indebtedness. This will help these companies strengthen their balance sheets so they can invest in job creation. It will also encourage investments in small businesses by cutting the capital gains tax on investors in small businesses that buy stock in the next two years and hold it for more than 5 years.
Congress also included incentives to create jobs and support our veterans by providing business tax credits for hiring recently discharged unemployed veterans or youth who have been out of school for 6 months prior to hire.
The Earned Income Tax Credit and the many other tax credits and benefits may work for you and your family and/or your business. Please take a look at them during this tax season as the savings can be significant. To find out more information about the EITC and other tax credits please call the IRS at 1-800-829-1040, Monday through Friday, 7:00 a.m. - 10:00p.m. or visit the IRS website at: http://www.irs.gov/.
U.S. Rep. Nick Rahall (D-WV) represents West Virginia's 3rd District
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