December 28, 2009
Many key issues remained unresolved when the members of Congress went home for a long holiday.
The biggest failure of the 2009 session is the inaction on the estate tax. Since there was no change in current law, the estate tax will disappear in 2010, then reappear in 2011 with a top rate of 60% and a low $1-million exemption. Taxwriters realize this is a nightmare, so they’ll push for some kind of estate tax solution next year.
Also stuck in limbo are a bunch of tax provisions that will sunset on December 31, 2009. Among them are the write-offs for college tuition, teachers’ supplies and state sales tax, as well as the break for donating IRA distributions to charity.
Congress did manage to renew one break: the COBRA health coverage subsidy. It originally allowed workers terminated after August 31, 2008 and before January 1, 2010 to get a nine-month subsidy for 65% of the premiums they paid to continue their coverage. That assistance has been extended to workers let go through February 28, 2010. Anyone who is eligible for the subsidy can now receive it for up to 15 months, up from nine months before. This also includes former employees whose subsidy payments ran out after November. Organizations will have to notify those eligible for the longer subsidy about the extension.
Source: Kiplinger Tax Letter, December 23, 2009
Source: Kiplinger Tax Letter
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