D.C. Hotline: tax relief act
President Barack Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act last month. What’s it mean? The National Lumber and Building Material Dealers Association explains:
Individual Tax Rates: Extends the 35% tax bracket for an additional two years.
Payroll Tax: A temporary 2% reduction in employee-paid Social Security payroll taxes for 2011.
Capital Gains & Dividends: Extends the current capital gains and dividends rates (15% for those in the 25% bracket and above) through 2012.
New Energy-Efficient Home Credit (45L): Extended through 2011 (lapsed after 2009).
Energy Efficiency Home Remodeling Credit (25C): Extended through 2011 at pre-ARRA levels, 10% up to $500, with a $200 cap on window purchases. Changes product criteria to Energy Star for windows, doors and skylights. (This was previously 30% up to $1,500 for 2009 to 2010.)
Bonus Depreciation: The law extends and temporarily increases the bonus depreciation provision for investments in new business equipment.
Tax benefits for certain retail improvements: The act extends for two years (through 2011) the special 15-year cost recovery period for certain leasehold improvements. For more information, visit dealer.org.