Taxpayer Advocate Service

E-filing through the free-file option is available under the American Recovery and Reinvestment Act of 2009 (ARRA). The IRS is swiftly implementing the tax-related aspects of this program, which includes significant highlights such as incentives for energy efficiency and renewable energy. The First-Time Homebuyer Credit has been expanded to offer up to $8,000 without a repayment requirement. Taxpayers purchasing certain new vehicles in 2009 can deduct the state and local sales taxes incurred. Enhanced credits for the tax years 2009 and 2010 include details on the earned income tax credit, additional child tax credit, and the new American Opportunity Credit for higher education. Unemployment benefits up to $2,400 will be tax-free in 2009. Small businesses can recover taxes paid on losses from the past five years. The COBRA program provides health insurance continuation subsidies for eligible individuals. Additionally, a $250 payment is available for Social Security recipients, veterans, and railroad retirees. The Health Coverage Tax Credit has increased from 65% to 80% of qualified health insurance premiums, expanding eligibility. More information about these and other recovery program provisions will be accessible on IRS.gov as it becomes available.