Cohen Urges Working Families to Take Advantage of Tax Breaks Before April 15 Filing Deadline

WASHINGTON, D.C. – Today, Congressman Steve Cohen (D-TN-9) urged working families in the Memphis area and across the state to take advantage of tax credits offered in the American Recovery and Reinvestment Act (ARRA) by the April 15th deadline. Taxpayers who have already filed their returns can amend them to include ARRA tax credits.

“Tax Day is rapidly approaching,” said Congressman Cohen. “During these tough economic times, our families need all the help they can get. The Recovery Act provides working families with tax credits that will give them the relief they need as they move forward through a difficult economy.”

According to the Internal Revenue Service (IRS), as of March 11, Tennesseans have e-filed 1,337,645 tax returns which is a one percent decrease from last year. However, 520,545 Tennesseans have e-filed from their own computers which is up 7.7 percent from last year. Also, the average federal refund totaled $3,036, an increase of $266 compared with the same period a year ago. For a breakdown of the tax benefits Tennessee will receive under ARRA click here.

Congressman Cohen urged taxpayers to visit www.IRS.gov for information about payment options or call the IRS toll free at 1-800-829-1040 for assistance getting tax breaks they did not know about.

Listed below are some of the programs families can utilize to take advantage of on their tax returns. For a full list of the many programs available, please visit www.IRS.gov/Recovery:

Making Work Pay Tax Cut: Provides immediate and sustained tax relief to about 95 percent of American workers and their families through the Making Work Pay tax credit, a refundable tax credit of up to $400 per worker ($800 per couple filing jointly), phasing out completely at $190,000 for couples filing jointly and $95,000 for single filers in 2009 and 2010.

• The credit provides over 110 million working families the tax relief they need and is being distributed largely by reducing tax withholding from workers’ paychecks beginning April 1, 2009

• 227,000 people in the 9th Congressional District will benefit from this tax credit

Child Tax credit: Cuts taxes for the families of more than 16 million children through an expansion of the child tax credit. The credit provides a new tax cut for more than 6 million children and increases the existing credit for more than 10 million children.

• 367,000 children will benefit from this tax credit in Tennessee

Earned Income Tax credit: Expands the Earned Income Tax Credit by providing tax relief to families with three or more children and increasing marriage penalty relief.

American Opportunity College Tax Credit: Helps more than 4 million additional students attend college with a new $2,500 tax credit for families, which is partly refundable. As a result, the nearly one-fifth of high school seniors who currently receive no tax credit will receive a tax cut to make college more affordable for the first time. These tax credits phase out completely at $90,000 for individuals and $180,000 for couples filing jointly.

• More than 87,000 students in Tennessee who did not benefit from federal college tax credits will now benefit

First-Time Homebuyers: Strengthens the housing market by enhancing the current first-time homebuyer tax credit by increasing it to $8,000 (up from $7,500) and by removing the repayment requirement. This tax credit has been credited with bringing greater stability to the housing market.

• 47,332 Tennesseans will benefit from this tax credit

Incentives to Buy New Cars: Provides a tax deduction for state and local sales taxes and excise taxes paid on the purchase of new cars, including light trucks and motor homes.

Energy Efficient Home Tax Credits: Promotes energy efficient investments in homes by extending and expanding tax credits through 2010 for investments such as new furnaces, energy-efficient windows and doors, and insulation. Increases the credit from 10 percent to 30 percent of the cost of the investment and raises the credit cap from $500 to $1,500, saving American families money on their energy bills.