1. 1 American Opportunity Credit Generally, 40% of the Hope credit is now refundable credit, which means that you can receive up to $1,000 even if you owe no taxes The full credit is available to individuals whose modified AGI is $80,000 or less, or $160,000 for married couples

2. 2 1040 Page 2

3. 3 First-Time Homebuyer’s Credit First-time homebuyers can claim a refundable tax credit of up to $8,000 ($4,000 if married filing separately) for homes purchased after December 31, 2008, and before December 1, 2009 Credit does not have to be repaid as long as the home remains primary residence for 36 months after purchase date Form 5405 is used to claim the credit Credit is phased out ratably for taxpayers with AGI over $75,000 ($150,000 if married filing jointly) Considered first-time homebuyer if taxpayer or spouse did not own any other main home during the three-year period ending on the date of purchase

4. 4 5405 Draft

5. 5 Additional Child Tax Credit  The earned income threshold generally needed to qualify for the additional child tax credit decreases from $8,500 to $3,000; as a result, more people will qualify for the credit  Lower threshold applies in 2009 and 2010

6. 6 Qualified Motor Vehicle Taxes New deduction for qualified motor vehicle taxes on purchase of certain new cars, trucks, motorcycles or motor homes Can add to the standard deduction or take as an itemized deduction (if not electing sales tax deduction) Deduction is allowed against the AMT Limited to tax imposed on the first $49,500 Phased out over modified AGI range of $125,000-$135,000 ($250,000- $260,000 if married filing jointly) Applies only to purchases made after February 16, 2009, and before January 1, 2010