Family Tax Credits in the American Recovery and Reinvestment Act of 2009

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The American Recovery and Reinvestment Act (ARRA) provides substantial new tax benefits for most working families. All of the provisions discussed below are at least partially refundable, so they will help low- and moderate-income workers with little or no federal income tax liability. This makes them more effective as economic recovery measures because lower-income people are more likely to spend additional income to purchase goods and services in their community. And, they will help keep millions of Americans out of poverty as the recession worsens.

The tax provisions discussed below do not affect 2008 tax returns (due April 15, 2009), with the potential exception of the First-Time Home Buyer Credit. The other changes will be seen in increased paychecks in 2009 and 2010 or when 2009 and 2010 tax returns are filed the following year.

State-by-state information on the Making Work Pay Credit, the Child Tax Credit, and the Earned Income Tax Credit is available here.