Tax Relief Act of 2010: Tax Credits

Before Act After Act
Making Work Pay tax credit For 2009 and 2010 only, a refundable tax credit equal to the lesser of 6.2% of an individual's earned income or $400 ($800 for married couples filing joint returns); phased out for higher incomes Not extended to 2011, but new one-year 2% reduction in employee Social Security payroll taxes in effect (applies to self-employment tax of self-employed individuals as well)
Earned income tax credit (EITC) Increased 45% credit percentage for families with three or more qualifying children, and increased phaseout amounts for married couples filing joint returns expired at end of 2010 2010 EITC provisions extended through 2012
American Opportunity tax credit (Hope tax credit) For 2010, a credit for up to $2,500 of a student's qualified tuition and related expenses for each of the first four years of post-secondary education; up to 40% of credit is refundable

Beginning in 2011, credit reduced to maximum $1,800 for first two years of post-secondary education; no portion refundable; lower income phaseout thresholds would apply
2010 limits and rules extended through 2012
Child tax credit For 2010: $1,000 maximum per child; refundable to the extent of 15% of earned income in excess of $3,000

Beginning in 2011: $500 maximum per child; separate, limited rules apply in determining if portion of credit is refundable
2010 rules extended through 2012
Child and dependent care credit Increased limit on eligible expenses and maximum credit percentage would have expired at end of 2010 2010 rules extended through 2012
Adoption tax credit and employer-paid adoption assistance Increased adoption tax credit and exclusion amount for employer-paid adoption assistance would have expired at the end of 2011, as would the refundable nature of credit 2010 rules extended through 2012

See also:
Summary | Tax Rates | Estate Tax | Gift and Transfer Tax | Business and SE | Tax Credits | Deductions | Other

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