Overview of 2009 Income
Tax Law Changes
Presented by:
Bob Erickson, Senior Technical Advisor &
Virginia Tarris, Tax Law Specialist
(Reviewer)
IRS Tax Forms & Publications
Washington, DC
Unemployment Compensation
The first $2,400 of unemployment
compensation is excluded from income
in 2009
Retirement Plan Distributions
The minimum required
distribution from IRAs and
most defined contribution
retirement plans has been
waived for calendar year 2009
Still required for calendar
year 2008, even if distribution
is not made until 2009
Not required in 2010 as
long as distribution is for
calendar year 2009
COBRA Premium Assistance
Effective for periods of coverage beginning after February 16, 2009,
employers can take a refundable employment tax credit equal to 65%
of the COBRA premiums paid for continuation coverage for an
assistance eligible individual for up to a 9-month period
The assistance eligible individual must pay the remaining 35%
An assistance eligible individual is one who:
Is eligible for COBRA coverage during the period beginning
September 1, 2008, and ending on December 31, 2009,
Elects such coverage,
Qualified for COBRA coverage during the above period as a
result of the involuntary termination of the covered employee’s
employment
The premium assistance payments are excluded from gross income
The premium assistance payments are partially or fully recaptured as
an additional tax for higher income individuals. The tax phases in
over a modified AGI range of $125,000-$145,000 ($250,000-$290,000
if married filing jointly).
A taxpayer can avoid any recapture tax by electing to waive the right
to premium assistance.
Economic Recovery Payments
Payment of $250 made to recipients of social security
benefits, supplemental security income, railroad retirement
benefits, and veterans disability compensation or pension
benefits
Had to be entitled to benefits for November or December
2008 or January 2009 to be eligible for this paym