Implementing the American Recovery and Reinvestment Act of 2009 (Recovery Act)
Economic Recovery Payments. Treasury's Financial Management Service, in coordination with the Social Security Administration, the Railroad Retirement Board, and the Department of Veterans Affairs are responsible for issuing over 64 million Economic Recovery payments to beneficiaries, an economic impact of more than $16 billion. Treasury will issue these one-time payments of $250 beginning in May and ending in late June.
Community Development Financial Institutions (CDFI) Fund. The Recovery Act appropriates an additional $98 million to the CDFI Fund for fiscal year (FY) 2009 funding round to make awards through the CDFI Program and the Native American CDFI Assistance (NACA) Program. All $98 million in grant funding will be announced in June. In order to accommodate an additional solicitation of applications, yet still expedite the flow of Recovery Act resources into low-income communities, the CDFI Fund will make two sets of award announcements in fiscal year (FY) 2009. A supplemental round of award announcements will be made in September.
New Markets Tax Credit (NMTC). The CDFI Fund is preparing to issue an additional $1.5 billion in tax credits to 2008 NMTC Program awardees by May, and an additional $1.5 billion in tax credits to 2009 NMTC Program awardees by October. The NMTC Program provides taxpayers with a credit against federal income taxes in exchange for making qualified equity investments in designated Community Development Entities (CDEs), who must provide investments in low-income communities.
Grants to States for Low-Income Housing Projects in Lieu of Low-Income Housing Tax Credit Allocations for 2009. Grants to State housing credit agencies to make sub-awards to finance the construction or acquisition and rehabilitation of qualified low-income housing in the same manner and generally subject to the same limitations as low-income housing tax credits (LIHTCs) allocated under section 42 of the Internal Revenue Code. The Recovery Act specifies that the exchange of credits for grants applies only to the 2009 LIHTC ceiling under IRC § 42(h)(3)(C), and that States may elect to exchange credits for cash grants subject to the requirements and limitations provided in Division B, sections 1404 & 1602 of the Recovery Act. To apply, click here.
Questions regarding these grants may be submitted to 1602Questions@treasury.gov.
To view answers to frequently asked questions, click here
Grants for Specified Energy Property in Lieu of Tax Credits. Grants for specified energy property (including qualified facilities that produce electricity from wind and certain other renewable resources; qualified fuel cell property; solar property; qualified small wind energy property; geothermal property; qualified microturbine property; combined heat and power system property; and geothermal heat pump property). Grants are available for property placed in service in 2009 or 2010. In some cases, if construction begins in 2009 or 2010, the grant can be claimed for property placed in service before 2013 for qualified wind facilities, 2014 for other qualified renewable energy facilities, and 2017 for other energy property. In general, projects that meet eligibility criteria for the energy property investment tax credit (ITC) (including qualified renewable energy facilities for which an election to claim the ITC can be made) are eligible for the grants. A person receiving a grant for specified energy property may not claim either the investment tax credit or the renewable energy production tax credit with respect to the same property.
Questions regarding these grants may be submitted to 1603Questions@treasury.gov.
Tax Relief Programs. The Internal Revenue Service is responsible for implementing about 30 tax changes that will provide relief to the American taxpayer and spur job growth. The following are key tax provisions that will be receiving immediate attention. Attachment I provides a list of all of the other tax changes being planned over the next year.
Immediate Tax Relief At a Glance
- Making Work Pay Credit -- Taxpayers can receive this benefit through a reduction in the amount of income tax that is withheld from their paychecks, or through claiming the credit on their tax returns.
- Expanded Tax Break for 2009 First-time Homebuyers -- Taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before December 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year. The maximum credit is $8,000.
- COBRA Health Insurance Continuation Premium Subsidy Eligible former employees, enrolled in their employer’s health plan at the time they lost their jobs are required to pay only 35 percent of the cost of COBRA coverage. Employers must treat the 35 percent payment by eligible former employees as full payment, but the employers are entitled to a credit for the other 65 percent of the COBRA cost on their payroll tax return.
- Build America Bonds -- Municipalities can elect to receive a direct interest payment subsidy from the Treasury on their bond issuances, in lieu of issuing bonds with the traditional interest tax exemption for bondholders. State and local governments would issue taxable bonds, and the Treasury would pay the State or local governments a subsidy of 35 percent of the interest they owe on each interest payment date.
- Sales Tax Deduction for Vehicle Purchases – Taxpayers can deduct the state and local sales and excise taxes paid on the purchase of new cars, light trucks, motor homes and motorcycles through 2009.
Learn more about the Recovery Act’s tax-related provisions.
To achieve the above, the department was also allocated the following administrative budget:
- IRS Health Insurance Tax Credit Administration: $80M
- Treasury Inspector General for Tax Administration: $7M
- Community Development Financial Institutions: $2M
- Financial Management Service: $7M
- Internal Revenue Service: $124M
Notice of Civil Rights Obligations