Please Note: Income threshold to use The Benefit Bank has increased to $57,000 Adjusted Gross Income.

The following highlights some of the updates or changes made to the TBB 2009 Federal Tax module:

ADDITIONS
• Income threshold to use The Benefit Bank increased to $57,000 Adjusted Gross Income

• First-Time Homebuyer Credit (Form 5405) – refundable credit for individuals who closed on a home by June 30, 2010. The credit has been expanded to allow long-time homeowners who are purchasing a replacement home to claim a credit. A long-time homeowner is defined as someone who owned and used the same home as his/her principal residence for five consecutive years. Individuals claiming this credit will not be able to electronically file.

• Standard Deduction for Certain Filers (Schedule L) – this used to be a worksheet that the IRS has now made into a schedule that must be filed with the return

• Making Work Pay & Government Retiree Credits (Schedule M) calculates and reports the following credits:

Making Work Pay Credit - a maximum of $400 for individuals and $800 for married couples
Government Retiree Credit – a $250 credit for those receiving pension or annuity distributions from the U.S. Government or any state or local government. This reduces the Making Work Pay Credit amount.
Economic Recovery Payment Credit – a $250 one-time payment made in 2009 to Social Security benefits recipients, SSI recipients, disabled veterans receiving VA benefits, and those receiving RRB benefits. This reduces the Making Work Pay Credit amount.

UPDATES
• The following new rules for 'qualifying child' were added for clarification:

-A qualifying child must be younger than you
-A child cannot be your qualifying child if he or she files a joint return, unless the return was filed only as a claim for refund
-If the parents of a child can claim the child as a qualifying child but they do not claim the child, no one else can claim the child as a qualifying child unless that person's AGI is higher than the highest AGI of any parent of the child.
-Your child is a qualifying child for purposes of the child tax credit only if you can and do claim an exemption for him or her

• Ability to use refunds to purchase Treasury bonds on Form 8888

• A message will appear if the withholding amounts from reporting forms and estimated or extension payments entered into the module are over a certain threshold

• The first $2,400 of unemployment compensation is exempt from income tax

• Taxpayers who buy a car, light truck, motor home, or motorcycle in 2009 are able to deduct, as part of the standard deduction OR as an itemized deduction, the state and local sales/excise taxes they paid that is attributable to the first $49,500 of the purchase price

• Standard deduction amounts increased to the following figures:
Single or Married Filing Separately: $5,700
Married Filing Jointly or Qualifying Widower: $11,400
Head of Household: $8,350
Additional amounts for taxpayers who are blind OR age 65 or older increased to $1,100 if the tax filer's filing status is Married Filing Jointly or Qualifying Widow and $1,400 if Single or Head Of Household

• Personal and dependency exemption amounts increased to $3,650 per exemption.

• The American Opportunity Credit modifies the Hope Credit in the following ways:

-It can now be claimed for expenses for the first four years of post-secondary education
-Qualifying expenses for the credit expanded to include books, supplies, and equipment needed for a course of study
-The maximum amount of the credit was increased to $2,500 per student
-Up to 40% of the credit amount can be refundable depending on the tax liability

• The earned income floor that a taxpayer needs in order to have a refundable part of the Child Tax Credit decreased to $3,000

• The income thresholds to receive the Earned Income Credit and the amount of credit have increased. Earned Income Thresholds are now as listed below:

$43,279 ($48,279 married filing jointly) with three or more qualifying children
$40,295 ($45,295 married filing jointly) with two or more qualifying children
$35,463 ($40,463 married filing jointly) with one qualifying child
$13,440($18,440 married filing jointly) with no qualifying children
The total of all interest, dividend, and capital gain income must be $3,100 or less regardless of whether the taxpayers have a qualifying child or not.
Maximum Credit Amounts are listed below:
$5,657 with two or more qualifying children
$5,028 with two or more qualifying children
$3,043 with one qualifying child
$457 with no qualifying children