2008 Emergency Economic Stabilization Act

Many anticipated tax extensions were included in the recently enacted massive rescue package.
Some of the key areas are highlighted below.

    You and Your Family
  • In 2008 and 2009, IRA holders over age 70½ can once again directly transfer tax-free up to $100,000 to an eligible charity (donor-advised) funds, supporting private foundations or charitable remainder trusts are not eligible). Make sure the charity knows you’re tapping an IRA and that you are the donor.
  • The $4,000 above-the-line deduction for higher education expenses (tied to AGI) has been reinstated through 2009.
  • The deduction for teachers’ supplies up to $250 has been extended through 2009.
  • The option to deduct state and local sales tax or state and local income tax, whichever is higher, has been re-instated through 2009. If deducting sales taxes, a taxpayer can use either actual receipts or tables provided by the IRS plus sales taxes paid on big-ticket items such as cars or boats.
  • The AMT exemption amounts for 2008 were increased to $69,950 for couples, $46,200 for singles.

    • Real Estate
  • Non-itemizers will be able to deduct property taxes in addition to the standard deduction for 2008 and 2009. The cap remains at $500 for singles; $1,000 marrieds.


    • Business
  • Extended through 2009: the R&D credit; the credit for hiring people from disadvantaged groups; 15-year depreciation for leasehold improvements and restaurant renovations (applicable to new restaurants and retail stores starting in 2009); and the new markets tax credit.


    • Other
  • The energy credits for solar equipment, fuel cells and energy-efficiency improvements to existing homes were extended though 2016.
  • There are many provisions related to the Midwestern Disaster Area which deal with withdrawals from retirement plans, adjustments to the casualty loss limitations, expansion of the education credits and many more items. The bill also includes provisions for victims of Hurricane Ike and all federally-declared disasters in 2008 and 2009.