H.R.1 Provides Tax Deduction for New Car Purchases
February 18, 2009 -- Yesterday in Denver, Colorado, President Barack Obama signed the American Reinvestment and Recovery Act of 2009.
One of the highlights of the bill is that it provides all taxpayers with a deduction for State and local sales and excise taxes paid on the purchase of new cars and light trucks through 2009. This deduction is subject to a phase-out for taxpayers with adjusted gross income in excess of $135,000 ($260,000 in the case of a joint return).
What the Legislation Does
Makes sales/excise car tax deductible on new car and light truck purchases, although it limits the deduction to the tax on up to $49,500 of the purchase price of a qualified motor vehicle.
The deductibility is allowed for new car purchases beginning Feb. 17, 2009 (date of enactment) and before January 1, 2010.
Who would qualify for this tax deduction?
The deduction is phased out for taxpayers with modified adjusted gross income between $125,000 and $135,000 ($250,000 and $260,000 in the case of a joint return).
The deduction is "above-the-line" – meaning it can be taken advantage of by itemizers and non-itemizers.
Article posted on: 09-Feb-18
