Today, Congressman Brian Baird (WA-03) urged Washington State residents to take advantage of state and local sales tax deductibility on their federal income tax returns. Congressman Baird also urged residents to take advantage of 25 different tax cuts in the Recovery Act which Congress passed last year.
Congressman Baird has long been a champion of sales tax deductibility for Washington State. Most recently, Congressman Baird helped pass H.R. 4213, the Tax Extenders Act of 2009, which includes a measure to extend the ability of Washington State residents to take an itemized deduction for state and local general sales tax. In the time since Congressman Baird's first sales tax deductibility legislation passed in 2004, Washington State taxpayers saved an estimated total of nearly $3 billion.
"Economic times are extremely tough, and Washington State taxpayers deserve more money in their pockets," Congressman Baird said. "Sales tax deductibility is a common-sense, fair solution for Washington State taxpayers, and I will continue to work to make it a permanent part of the nation's tax code."
Sales tax deductibility is estimated to save Washington State families and businesses as much as $500 million in federal taxes this year.
In addition to sales tax deductibility, taxpayers in Washington's Third District and across the country can claim a variety of benefits on their 2009 tax returns thanks to the Recovery Act, including:
* The Making Work Pay tax credit -- Ninety-five percent of working families are already receiving the Recovery Act's Making Work Pay tax credit of $400 for an individual or $800 for married couples filing jointly in their 2009 paychecks -- and will continue to see these benefits in 2010. In the Third District, 293,000 families are benefiting from the Making Work Pay tax credit.
* Tax credits for college expenses -- Families and students are eligible for up to $2,500 in tax savings under the American Opportunity Credit as well as enhanced benefits under 529 college savings plans, which helps families and students pay for college expenses. More than 67,000 students in Washington will be able to benefit from the Recovery Act with federal college tax credits they previously did not receive.
* The First Time Homebuyers tax credit -- First time homebuyers can get a credit of up to $8,000 for homes purchased by April 30, 2010 under the First Time Homebuyer tax credit. In Washington, almost 33,000 households have already taken advantage of the First Time Homebuyers tax credit.
* Tax credits for energy efficient renovations -- Taxpayers are eligible for up to $1,500 in tax credits for making energy-efficient improvements to their homes, such as adding insulation and installing energy efficient windows.
* The vehicle sales tax deduction -- Taxpayers can deduct the state and local sales taxes they paid for new vehicles purchased from Feb. 17, 2009 through Dec. 31, 2009 under the vehicle sales tax deduction.
* Expanded family tax credits -- Moderate income families with children may be eligible for an increase in the Earned Income Tax Credit and the additional Child Tax Credit.
* Tax-free unemployment benefits -- Thanks to the Recovery Act, individuals who received unemployment insurance in 2009 do not have to pay taxes on the first $2,400 of such earnings.