Recently, administration officials Jared Bernstein, chief economist to Vice President Joe Biden, Michael Mundaca, assistant secretary of the Treasury for Tax Policy, and Brian Deese of the National Economic Council, discussed ways American families can benefit from Recovery Act tax credits, as they file their 2009 tax return.
President Barack Obama has allotted $160 billion in Recovery Act tax credits that will primarily benefit working families and small businesses.
The first tax credit is for middle-class working families, and more than 70 percent of those families will be eligible for a tax credit. Families making more than $43,000 a year will receive a 20 percent tax credit for their childcare expenses, up to $6,000. Families earning less than $43,000 are eligible for an even higher credit.
There is also the American Opportunity tax credit, which is a $2,500 credit on college tuition. The credit which was originally only for two years has been extended to all four years of the student's post-secondary education, and families who make less than $80,000 are eligible.
There is a $8,000 First-Time Home Buyers Tax Credit. It was created in 2009, but its benefits have rolled over into this year until April 30. Homes bought before that day are eligible for the credit, and can be put on this year's tax return.
Finally, there is a Resident House Tax Credit which will provide a 30 percent credit for improvements made to a home such as going green, switching to alternative fuel sources or including solar panels. This credit caps at $1,500.
"They are double-duty credits," Bernstein said. "They help provide relief for families, and when families spend that money, they in turn help the economy and create jobs."