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H.R.1
American Recovery and Reinvestment Act of 2009 (Public Print)
TITLE I--TAX PROVISIONS
Sec. 1000. Short title, etc.
Subtitle A--Tax Relief for Individuals and Families
PART I--General Tax Relief
Sec. 1001. Making work pay credit.
Sec. 1002. Temporary increase in earned income tax credit.
Sec. 1003. Temporary increase of refundable portion of child credit.
Sec. 1004. American opportunity tax credit.
Sec. 1005. Computer technology and equipment allowed as a qualified higher education expense for section 529 accounts in 2009 and 2010.
Sec. 1006. Credit for certain home purchases.
Sec. 1007. Suspension of tax on portion of unemployment compensation.
Sec. 1008. Above-the-line deduction for interest on indebtedness with respect to the purchase of certain motor vehicles.
Sec. 1009. Above-the-line deduction for State sales tax and excise tax on the purchase of certain motor vehicles.
PART II--Alternative Minimum Tax Relief
Sec. 1011. Extension of alternative minimum tax relief for nonrefundable personal credits.
Sec. 1012. Extension of increased alternative minimum tax exemption amount.
Subtitle B--Energy Incentives
PART I--Renewable Energy Incentives
Sec. 1101. Extension of credit for electricity produced from certain renewable resources.
Sec. 1102. Election of investment credit in lieu of production credit.
Sec. 1103. Repeal of certain limitations on credit for renewable energy property.
PART II--Increased Allocations of New Clean Renewable Energy Bonds and Qualified Energy Conservation Bonds
Sec. 1111. Increased limitation on issuance of new clean renewable energy bonds.
Sec. 1112. Increased limitation on issuance of qualified energy conservation bonds.
PART III--Energy Conservation Incentives
Sec. 1121. Extension and modification of credit for nonbusiness energy property.
Sec. 1122. Modification of credit for residential energy efficient property.
Sec. 1123. Temporary increase in credit for alternative fuel vehicle refueling property.
PART IV--Energy Research Incentives
Sec. 1131. Increased research credit for energy research.
PART V--Modification of Credit for Carbon Dioxide Sequestration
Sec. 1141. Application of monitoring requirements to carbon dioxide used as a tertiary injectant.
PART VI--Plug-in Electric Drive Motor Vehicles
Sec. 1151. Modification of credit for qualified plug-in electric motor vehicles.
Subtitle C--Tax Incentives for Business
PART I--Temporary Investment Incentives
Sec. 1201. Special allowance for certain property acquired during 2009.
Sec. 1202. Temporary increase in limitations on expensing of certain depreciable business assets.
PART II--5-Year Carryback of Operating Losses
Sec. 1211. 5-year carryback of operating losses.
Sec. 1212. Exception for TARP recipients.
PART III--Incentives for New Jobs
Sec. 1221. Incentives to hire unemployed veterans and disconnected youth.
PART IV--Cancellation of Indebtedness
Sec. 1231. Deferral and ratable inclusion of income arising from indebtedness discharged by the repurchase of a debt instrument.
PART V--Qualified Small Business Stock
Sec. 1241. Special rules applicable to qualified small business stock for 2009 and 2010.
PART VI--Parity for Transportation Fringe Benefits
Sec. 1251. Increased exclusion amount for commuter transit benefits and transit passes.
PART VII--S Corporations
Sec. 1261. Temporary reduction in recognition period for built-in gains tax.
PART VIII--Broadband Incentives
Sec. 1271. Broadband Internet access tax credit.
PART IX--Clarification of Regulations Related to Limitations on Certain Built-in Losses Following an Ownership Change
Sec. 1281. Clarification of regulations related to limitations on certain built-in losses following an ownership change.
Subtitle D--Manufacturing Recovery Provisions
Sec. 1301. Temporary expansion of availability of industrial development bonds to facilities manufacturing intangible property.
Sec. 1302. Credit for investment in advanced energy facilities.
Subtitle E--Economic Recovery Tools
Sec. 1401. Recovery zone bonds.
Sec. 1402. Tribal economic development bonds.
Sec. 1403. Modifications to new markets tax credit.
Subtitle F--Infrastructure Financing Tools
PART I--Improved Marketability for Tax-Exempt Bonds
Sec. 1501. De minimis safe harbor exception for tax-exempt interest expense of financial institutions.
Sec. 1502. Modification of small issuer exception to tax-exempt interest expense allocation rules for financial institutions.
Sec. 1503. Temporary modification of alternative minimum tax limitations on tax-exempt bonds.
Sec. 1504. Modification to high speed intercity rail facility bonds.
PART II--Delay in Application of Withholding Tax on Government Contractors
Sec. 1511. Delay in application of withholding tax on government contractors.
PART III--Tax Credit Bonds for Schools
Sec. 1521. Qualified school construction bonds.
Sec. 1522. Extension and expansion of qualified zone academy bonds.
PART IV--Build America Bonds
Sec. 1531. Build America bonds.
Subtitle G--Economic Recovery Payments to Certain Individuals
Sec. 1601. Economic recovery payment to recipients of Social Security, supplemental security income, railroad retirement benefits, and veterans disability compensation or pension benefits.
Subtitle H--Trade Adjustment Assistance
Sec. 1701. Temporary extension of Trade Adjustment Assistance program.
Subtitle I--Prohibition on Collection of Certain Payments Made Under the Continued Dumping and Subsidy Offset Act of 2000
Sec. 1801. Prohibition on collection of certain payments made under the Continued Dumping and Subsidy Offset Act of 2000.
Subtitle J--Other Provisions
Sec. 1901. Application of certain labor standards to projects financed with certain tax-favored bonds.
Sec. 1902. Increase in public debt limit.
Sec. 1903. Election to accelerate the low-income housing tax credit.
Subtitle A--Tax Relief for Individuals and Families
PART I--GENERAL TAX RELIEF
SEC. 1001. MAKING WORK PAY CREDIT.
(a) In General- Subpart C of part IV of subchapter A of chapter 1 is amended by inserting after section 36 the following new section:
`SEC. 36A. MAKING WORK PAY CREDIT.
`(a) Allowance of Credit- In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the lesser of--
`(1) 6.2 percent of earned income of the taxpayer, or
`(2) $500 ($1,000 in the case of a joint return).
`(b) Limitation Based on Modified Adjusted Gross Income-
`(1) IN GENERAL- The amount allowable as a credit under subsection (a) (determined without regard to this paragraph and subsection (c)) for the taxable year shall be reduced (but not below zero) by 4 percent of so much of the taxpayer's modified adjusted gross income as exceeds $70,000 ($140,000 in the case of a joint return).
`(2) MODIFIED ADJUSTED GROSS INCOME- For purposes of subparagraph (A), the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
`(c) Reduction for Certain Other Payments- The credit allowed under subsection (a) for any taxable year shall be reduced by the amount of any payments received by the taxpayer during such taxable year under section 1601 of the American Recovery and Reinvestment Tax Act of 2009.
`(d) Definitions- For purposes of this section--
`(1) ELIGIBLE INDIVIDUAL- The term `eligible individual' means any individual other than--
`(A) any nonresident alien individual,
`(B) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, and
Such term shall not include any individual unless the requirements of section 32(c)(1)(E) are met with respect to such individual.
`(2) EARNED INCOME- The term `earned income' has the meaning given such term by section 32(c)(2), except that such term shall not include net earnings from self-employment which are not taken into account in computing taxable income. For purposes of the preceding sentence, any amount excluded from gross income by reason of section 112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year.
`(e) Termination- This section shall not apply to taxable years beginning after December 31, 2010.'.
(b) Treatment of Possessions-
(1) PAYMENTS TO POSSESSIONS-
(A) MIRROR CODE POSSESSION- The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the amendments made by this section with respect to taxable years beginning in 2009 and 2010. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.
(B) OTHER POSSESSIONS- The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the amendments made by this section for taxable years beginning in 2009 and 2010 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession.
(2) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED STATES INCOME TAXES- No credit shall be allowed against United States income taxes for any taxable year under section 36A of the Internal Revenue Code of 1986 (as added by this section) to any person--
(A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section for such taxable year, or
(B) who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year.
(3) DEFINITIONS AND SPECIAL RULES-
(A) POSSESSION OF THE UNITED STATES- For purposes of this subsection, the term `possession of the United States' includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.
(B) MIRROR CODE TAX SYSTEM- For purposes of this subsection, the term `mirror code tax system' means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
(C) TREATMENT OF PAYMENTS- For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from the credit allowed under section 36A of the Internal Revenue Code of 1986 (as added by this section).
(c) Refunds Disregarded in the Administration of Federal Programs and Federally Assisted Programs- Any credit or refund allowed or made to any individual by reason of section 36A of the Internal Revenue Code of 1986 (as added by this section) or by reason of subsection (b) of this section shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following 2 months, for purposes of determining the eligibility of such individual or any other individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.
(d) Authority Relating to Clerical Errors- Section 6213(g)(2) is amended by striking `and' at the end of subparagraph (L)(ii), by striking the period at the end of subparagraph (M) and inserting `, and', and by adding at the end the following new subparagraph:
`(N) an omission of the reduction required under section 36A(c) with respect to the credit allowed under section 36A or an omission of the correct TIN required under section 36A(d)(1).'.
(e) Conforming Amendments-
(1) Section 6211(b)(4)(A) is amended by inserting `36A,' after `36,'.
(2) Section 1324(b)(2) of title 31, United States Code, is amended by inserting `36A,' after `36,'.
(3) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 36 the following new item:
`Sec. 36A. Making work pay credit.'.
(f) Effective Date- This section, and the amendments made by this section, shall apply to taxable years beginning after December 31, 2008.
SEC. 1002. TEMPORARY INCREASE IN EARNED INCOME TAX CREDIT.
(a) In General- Subsection (b) of section 32 is amended by adding at the end the following new paragraph:
`(3) SPECIAL RULES FOR 2009 AND 2010- In the case of any taxable year beginning in 2009 or 2010--
`(A) INCREASED CREDIT PERCENTAGE FOR 3 OR MORE QUALIFYING CHILDREN- In the case of a taxpayer with 3 or more qualifying children, the credit percentage is 45 percent.
`(B) REDUCTION OF MARRIAGE PENALTY-
`(i) IN GENERAL- The dollar amount in effect under paragraph (2)(B) shall be $5,000.
`(ii) INFLATION ADJUSTMENT- In the case of any taxable year beginning in 2010, the $5,000 amount in clause (i) shall be increased by an amount equal to--
`(I) such dollar amount, multiplied by
`(II) the cost of living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins determined by substituting `calendar year 2008' for `calendar year 1992' in subparagraph (B) thereof.
`(iii) ROUNDING- Subparagraph (A) of subsection (j)(2) shall apply after taking into account any increase under clause (ii).'.
(b) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
SEC. 1003. TEMPORARY INCREASE OF REFUNDABLE PORTION OF CHILD CREDIT.
(a) In General- Paragraph (4) of section 24(d) is amended to read as follows:
`(4) SPECIAL RULE FOR 2009 AND 2010- Notwithstanding paragraph (3), in the case of any taxable year beginning in 2009 or 2010, the dollar amount in effect for such taxable year under paragraph (1)(B)(i) shall be $8,100.'.
(b) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.
SEC. 1004. AMERICAN OPPORTUNITY TAX CREDIT.
(a) In General- Section 25A (relating to Hope scholarship credit) is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection:
`(i) American Opportunity Tax Credit- In the case of any taxable year beginning in 2009 or 2010--
`(1) INCREASE IN CREDIT- The Hope Scholarship Credit shall be an amount equal to the sum of--
`(A) 100 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished to the eligible student during any academic period beginning in such taxable year) as does not exceed $2,000, plus
`(B) 25 percent of such expenses so paid as exceeds $2,000 but does not exceed $4,000.
`(2) CREDIT ALLOWED FOR FIRST 4 YEARS OF POST-SECONDARY EDUCATION- Subparagraphs (A) and (C) of subsection (b)(2) shall be applied by substituting `4' for `2'.
`(3) QUALIFIED TUITION AND RELATED EXPENSES TO INCLUDE REQUIRED COURSE MATERIALS- Subsection (f)(1)(A) shall be applied by substituting `tuition, fees, and course materials' for `tuition and fees'.
`(4) INCREASE IN AGI LIMITS FOR HOPE SCHOLARSHIP CREDIT- In lieu of applying subsection (d) with respect to the Hope Scholarship Credit, such credit (determined without regard to this paragraph) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit (as so determined) as--
`(i) the taxpayer's modified adjusted gross income (as defined in subsection (d)(3)) for such taxable year, over
`(ii) $80,000 ($160,000 in the case of a joint return), bears to
`(B) $10,000 ($20,000 in the case of a joint return).
`(5) CREDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX- In the case of a taxable year to which section 26(a)(2) does not apply, so much of the credit allowed under subsection (a) as is attributable to the Hope Scholarship Credit shall not exceed the excess of--
`(A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
`(B) the sum of the credits allowable under this subpart (other than this subsection and sections 23, 25D, and 30D) and section 27 for the taxable year.
Any reference in this section or section 24, 25, 26, 25B, 904, or 1400C to a credit allowable under this subsection shall be treated as a reference to so much of the credit allowable under subsection (a) as is attributable to the Hope Scholarship Credit.
`(6) PORTION OF CREDIT MADE REFUNDABLE- 30 percent of so much of the credit allowed under subsection (a) as is attributable to the Hope Scholarship Credit (determined after application of paragraph (4) and without regard to this paragraph and section 26(a)(2) or paragraph (5), as the case may be) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)).
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