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Subtitle A—Tax Relief for Individuals and Families 
PART I—GENERAL TAX RELIEF 
Sec. 1001. Making work pay credit. 
Sec. 1002. Temporary increase in earned income tax credit. 
Sec. 1003. Temporary increase of refundable portion of child credit. 
Sec. 1004. American opportunity tax credit. 
Sec. 1005. Computer technology and equipment allowed as a qualified higher edu-
cation expense for section 529 accounts in 2009 and 2010. 
Sec. 1006. Credit for certain home purchases. 
Sec. 1007. Suspension of tax on portion of unemployment compensation. 
Sec. 1008. Above-the-line deduction for interest on indebtedness with respect to the 
purchase of certain motor vehicles. 
Sec. 1009. Above-the-line deduction for State sales tax and excise tax on the pur-
chase of certain motor vehicles. 
PART II—ALTERNATIVE MINIMUM TAX RELIEF 
Sec. 1011. Extension of alternative minimum tax relief for nonrefundable per-
sonal credits. 
Sec. 1012. Extension of increased alternative minimum tax exemption amount. 
Subtitle B—Energy Incentives 
PART I—RENEWABLE ENERGY INCENTIVES 
Sec. 1101. Extension of credit for electricity produced from certain renewable re-
sources. 
Sec. 1102. Election of investment credit in lieu of production credit. 
Sec. 1103. Repeal of certain limitations on credit for renewable energy property. 
PART II—INCREASED ALLOCATIONS OF NEW CLEAN RENEWABLE ENERGY 
BONDS AND QUALIFIED ENERGY CONSERVATION BONDS 
Sec. 1111. Increased limitation on issuance of new clean renewable energy bonds. 
Sec. 1112. Increased limitation on issuance of qualified energy conservation 
bonds. 
PART III—ENERGY CONSERVATION INCENTIVES 
Sec. 1121. Extension and modification of credit for nonbusiness energy property. 
Sec. 1122. Modification of credit for residential energy efficient property. 
Sec. 1123. Temporary increase in credit for alternative fuel vehicle refueling 
property. 
PART IV—ENERGY RESEARCH INCENTIVES 
Sec. 1131. Increased research credit for energy research. 
PART V—MODIFICATION OF CREDIT FOR CARBON DIOXIDE SEQUESTRATION 
Sec. 1141. Application of monitoring requirements to carbon dioxide used as a 
tertiary injectant. 
PART VI—PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES 
Sec. 1151. Modification of credit for qualified plug-in electric motor vehicles. 
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Subtitle C—Tax Incentives for Business 
PART I—TEMPORARY INVESTMENT INCENTIVES 
Sec. 1201. Special allowance for certain property acquired during 2009. 
Sec. 1202. Temporary increase in limitations on expensing of certain depreciable 
business assets. 
PART II—5-YEAR CARRYBACK OF OPERATING LOSSES 
Sec. 1211. 5-year carryback of operating losses. 
Sec. 1212. Exception for TARP recipients. 
PART III—INCENTIVES FOR NEW JOBS 
Sec. 1221. Incentives to hire unemployed veterans and disconnected youth. 
PART IV—CANCELLATION OF INDEBTEDNESS 
Sec. 1231. Deferral and ratable inclusion of income arising from indebtedness 
discharged by the repurchase of a debt instrument. 
PART V—QUALIFIED SMALL BUSINESS STOCK 
Sec. 1241. Special rules applicable to qualified small business stock for 2009 and 
2010. 
PART VI—PARITY FOR TRANSPORTATION FRINGE BENEFITS 
Sec. 1251. Increased exclusion amount for commuter transit benefits and transit 
passes. 
PART VII—S CORPORATIONS 
Sec. 1261. Temporary reduction in recognition period for built-in gains tax. 
PART VIII—BROADBAND INCENTIVES 
Sec. 1271. Broadband Internet access tax credit. 
PART IX—CLARIFICATION OF REGULATIONS RELATED TO LIMITATIONS ON 
CERTAIN BUILT-IN LOSSES FOLLOWING AN OWNERSHIP CHANGE 
Sec. 1281. Clarification of regulations related to limitations on certain built-in 
losses following an ownership change. 
Subtitle D—Manufacturing Recovery Provisions 
Sec. 1301. Temporary expansion of availability of industrial development bonds 
to facilities manufacturing intangible property. 
Sec. 1302. Credit for investment in advanced energy facilities. 
Subtitle E—Economic Recovery Tools 
Sec. 1401. Recovery zone bonds. 
Sec. 1402. Tribal economic development bonds. 
Sec. 1403. Modifications to new markets tax credit. 
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Subtitle F—Infrastructure Financing Tools 
PART I—IMPROVED MARKETABILITY FOR TAX-EXEMPT BONDS 
Sec. 1501. De minimis safe harbor exception for tax-exempt interest expense of fi-
nancial institutions. 
Sec. 1502. Modification of small issuer exception to tax-exempt interest expense 
allocation rules for financial institutions. 
Sec. 1503. Temporary modification of alternative minimum tax limitations on 
tax-exempt bonds. 
Sec. 1504. Modification to high speed intercity rail facility bonds. 
PART II—DELAY IN APPLICATION OF WITHHOLDING TAX ON GOVERNMENT 
CONTRACTORS 
Sec. 1511. Delay in application of withholding tax on government contractors. 
PART III—TAX CREDIT BONDS FOR SCHOOLS 
Sec. 1521. Qualified school construction bonds. 
Sec. 1522. Extension and expansion of qualified zone academy bonds. 
PART IV—BUILD AMERICA BONDS 
Sec. 1531. Build America bonds. 
Subtitle G—Economic Recovery Payments to Certain Individuals 
Sec. 1601. Economic recovery payment to recipients of Social Security, supple-
mental security income, railroad retirement benefits, and vet-
erans disability compensation or pension benefits. 
Subtitle H—Trade Adjustment Assistance 
Sec. 1701. Temporary extension of Trade Adjustment Assistance program. 
Subtitle I—Prohibition on Collection of Certain Payments Made Under the 
Continued Dumping and Subsidy Offset Act of 2000 
Sec. 1801. Prohibition on collection of certain payments made under the Contin-
ued Dumping and Subsidy Offset Act of 2000. 
Subtitle J—Other Provisions 
Sec. 1901. Application of certain labor standards to projects financed with cer-
tain tax-favored bonds. 
Sec. 1902. Increase in public debt limit. 
Sec. 1903. Election to accelerate the low-income housing tax credit. 
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Subtitle A—Tax Relief for 
Individuals and Families 
PART I—GENERAL TAX RELIEF 
SEC. 1001. MAKING WORK PAY CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of subchapter 
A of chapter 1 is amended by inserting after section 36 the 
following new section: 
‘‘SEC. 36A. MAKING WORK PAY CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eligi-
ble individual, there shall be allowed as a credit against 
the tax imposed by this subtitle for the taxable year an 
amount equal to the lesser of— 
‘‘(1) 6.2 percent of earned income of the tax-
payer, or 
‘‘(2) $500 ($1,000 in the case of a joint return). 
‘‘(b) LIMITATION BASED
ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount allowable as a 
credit under subsection (a) (determined without re-
gard to this paragraph and subsection (c)) for the 
taxable year shall be reduced (but not below zero) by 
4 percent of so much of the taxpayer’s modified ad-
justed gross income as exceeds $70,000 ($140,000 in 
the case of a joint return). 
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‘‘(2) MODIFIED ADJUSTED GROSS INCOME.—For 
purposes of subparagraph (A), the term ‘modified ad-
justed gross income’ means the adjusted gross income 
of the taxpayer for the taxable year increased by any 
amount excluded from gross income under section 
911, 931, or 933. 
‘‘(c) REDUCTION FOR CERTAIN OTHER PAYMENTS.— 
The credit allowed under subsection (a) for any taxable year 
shall be reduced by the amount of any payments received 
by the taxpayer during such taxable year under section 
1601 of the American Recovery and Reinvestment Tax Act 
of 2009. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE INDIVIDUAL.—The term ‘eligible 
individual’ means any individual other than— 
‘‘(A) any nonresident alien individual, 
‘‘(B) any individual with respect to whom 
a deduction under section 151 is allowable to an-
other taxpayer for a taxable year beginning in 
the calendar year in which the individual’s tax-
able year begins, and 
‘‘(C) an estate or trust. 
Such term shall not include any individual unless the 
requirements of section 32(c)(1)(E) are met with re-
spect to such individual. 
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‘‘(2) EARNED
INCOME.—The term ‘earned in-
come’ has the meaning given such term by section 
32(c)(2), except that such term shall not include net 
earnings from self-employment which are not taken 
into account in computing taxable income. For pur-
poses of the preceding sentence, any amount excluded 
from gross income by reason of section 112 shall be 
treated as earned income which is taken into account 
in computing taxable income for the taxable year. 
‘‘(e) TERMINATION.—This section shall not apply to 
taxable years beginning after December 31, 2010.’’. 
(b) TREATMENT OF POSSESSIONS.— 
(1) PAYMENTS TO POSSESSIONS.— 
(A) MIRROR CODE POSSESSION.—The Sec-
retary of the Treasury shall pay to each posses-
sion of the United States with a mirror code tax 
system amounts equal to the loss to that posses-
sion by reason of the amendments made by this 
section with respect to taxable years beginning 
in 2009 and 2010. Such amounts shall be deter-
mined by the Secretary of the Treasury based on 
information provided by the government of the 
respective possession. 
(B) OTHER
POSSESSIONS.—The Secretary 
of the Treasury shall pay to each possession of 
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the United States which does not have a mirror 
code tax system amounts estimated by the Sec-
retary of the Treasury as being equal to the ag-
gregate benefits that would have been provided to 
residents of such possession by reason of the 
amendments made by this section for taxable 
years beginning in 2009 and 2010 if a mirror 
code tax system had been in effect in such posses-
sion. The preceding sentence shall not apply with 
respect to any possession of the United States 
unless such possession has a plan, which has 
been approved by the Secretary of the Treasury, 
under which such possession will promptly dis-
tribute such payments to the residents of such 
possession. 
(2) COORDINATION
WITH
CREDIT
ALLOWED 
AGAINST UNITED STATES INCOME TAXES.—No credit 
shall be allowed against United States income taxes 
for any taxable year under section 36A of the Internal 
Revenue Code of 1986 (as added by this section) to 
any person— 
(A) to whom a credit is allowed against 
taxes imposed by the possession by reason of the 
amendments made by this section for such tax-
able year, or 
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(B) who is eligible for a payment under a 
plan described in paragraph (1)(B) with respect 
to such taxable year. 
(3) DEFINITIONS AND SPECIAL RULES.— 
(A) POSSESSION OF THE UNITED STATES.— 
For purposes of this subsection, the term ‘‘posses-
sion of the United States’’ includes the Common-
wealth of Puerto Rico and the Commonwealth of 
the Northern Mariana Islands. 
(B) MIRROR CODE TAX SYSTEM.—For pur-
poses of this subsection, the term ‘‘mirror code 
tax system’’ means, with respect to any posses-
sion of the United States, the income tax system 
of such possession if the income tax liability of 
the residents of such possession under such sys-
tem is determined by reference to the income tax 
laws of the United States as if such possession 
were the United States. 
(C) TREATMENT OF PAYMENTS.—For pur-
poses of section 1324(b)(2) of title 31, United 
States Code, the payments under this subsection 
shall be treated in the same manner as a refund 
due from the credit allowed under section 36A of 
the Internal Revenue Code of 1986 (as added by 
this section). 
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(c) REFUNDS DISREGARDED IN THE ADMINISTRATION 
OF FEDERAL PROGRAMS AND FEDERALLY ASSISTED PRO-
GRAMS.—Any credit or refund allowed or made to any indi-
vidual by reason of section 36A of the Internal Revenue 
Code of 1986 (as added by this section) or by reason of sub-
section (b) of this section shall not be taken into account 
as income and shall not be taken into account as resources 
for the month of receipt and the following 2 months, for 
purposes of determining the eligibility of such individual 
or any other individual for benefits or assistance, or the 
amount or extent of benefits or assistance, under any Fed-
eral program or under any State or local program financed 
in whole or in part with Federal funds. 
(d) AUTHORITY RELATING TO CLERICAL ERRORS.— 
Section 6213(g)(2) is amended by striking ‘‘and’’ at the end 
of subparagraph (L)(ii), by striking the period at the end 
of subparagraph (M) and inserting ‘‘, and’’, and by adding 
at the end the following new subparagraph: 
‘‘(N) an omission of the reduction required 
under section 36A(c) with respect to the credit 
allowed under section 36A or an omission of the 
correct TIN required under section 36A(d)(1).’’. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A) is amended by insert-
ing ‘‘36A,’’ after ‘‘36,’’. 
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(2) Section 1324(b)(2) of title 31, United States 
Code, is amended by inserting ‘‘36A,’’ after ‘‘36,’’. 
(3) The table of sections for subpart C of part IV 
of subchapter A of chapter 1 is amended by inserting 
after the item relating to section 36 the following new 
item: 
‘‘Sec. 36A. Making work pay credit.’’. 
(f) EFFECTIVE DATE.—This section, and the amend-
ments made by this section, shall apply to taxable years 
beginning after December 31, 2008. 
SEC. 1002. TEMPORARY INCREASE IN EARNED INCOME TAX 
CREDIT. 
(a) IN GENERAL.—Subsection (b) of section 32 is 
amended by adding at the end the following new paragraph: 
‘‘(3) SPECIAL RULES FOR 2009 AND 2010.—In the 
case of any taxable year beginning in 2009 or 2010— 
‘‘(A) INCREASED CREDIT PERCENTAGE FOR 
3 OR MORE QUALIFYING CHILDREN.—In the case 
of a taxpayer with 3 or more qualifying chil-
dren, the credit percentage is 45 percent. 
‘‘(B) REDUCTION OF MARRIAGE PENALTY.— 
‘‘(i) IN GENERAL.—The dollar amount 
in effect under paragraph (2)(B) shall be 
$5,000. 
‘‘(ii) INFLATION ADJUSTMENT.—In the 
case of any taxable year beginning in 2010, 
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the $5,000 amount in clause (i) shall be in-
creased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost of living adjustment 
determined under section 1(f)(3) for 
the calendar year in which the taxable 
year begins determined by substituting 
‘calendar year 2008’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
‘‘(iii) ROUNDING.—Subparagraph (A) 
of subsection (j)(2) shall apply after taking 
into account any increase under clause 
(ii).’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
SEC. 1003. TEMPORARY INCREASE OF REFUNDABLE POR-
TION OF CHILD CREDIT. 
(a) IN GENERAL.—Paragraph (4) of section 24(d) is 
amended to read as follows: 
‘‘(4) SPECIAL RULE FOR 2009 AND 2010.—Not-
withstanding paragraph (3), in the case of any tax-
able year beginning in 2009 or 2010, the dollar 
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amount in effect for such taxable year under para-
graph (1)(B)(i) shall be $8,100.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
SEC. 1004. AMERICAN OPPORTUNITY TAX CREDIT. 
(a) IN GENERAL.—Section 25A (relating to Hope 
scholarship credit) is amended by redesignating subsection 
(i) as subsection (j) and by inserting after subsection (h) 
the following new subsection: 
‘‘(i) AMERICAN OPPORTUNITY TAX CREDIT.—In the 
case of any taxable year beginning in 2009 or 2010— 
‘‘(1) INCREASE IN CREDIT.—The Hope Scholar-
ship Credit shall be an amount equal to the sum of— 
‘‘(A) 100 percent of so much of the qualified 
tuition and related expenses paid by the tax-
payer during the taxable year (for education fur-
nished to the eligible student during any aca-
demic period beginning in such taxable year) as 
does not exceed $2,000, plus 
‘‘(B) 25 percent of such expenses so paid as 
exceeds $2,000 but does not exceed $4,000. 
‘‘(2) CREDIT ALLOWED FOR FIRST 4 YEARS OF 
POST-SECONDARY
EDUCATION.—Subparagraphs (A) 
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and (C) of subsection (b)(2) shall be applied by sub-
stituting ‘4’ for ‘2’. 
‘‘(3) QUALIFIED
TUITION
AND
RELATED
EX-
PENSES
TO
INCLUDE
REQUIRED
COURSE
MATE-
RIALS.—Subsection (f)(1)(A) shall be applied by sub-
stituting ‘tuition, fees, and course materials’ for ‘tui-
tion and fees’. 
‘‘(4) INCREASE IN AGI LIMITS FOR HOPE SCHOL-
ARSHIP CREDIT.—In lieu of applying subsection (d) 
with respect to the Hope Scholarship Credit, such 
credit (determined without regard to this paragraph) 
shall be reduced (but not below zero) by the amount 
which bears the same ratio to such credit (as so deter-
mined) as— 
‘‘(A) the excess of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income (as defined in subsection 
(d)(3)) for such taxable year, over 
‘‘(ii) $80,000 ($160,000 in the case of 
a joint return), bears to 
‘‘(B) $10,000 ($20,000 in the case of a joint 
return). 
‘‘(5) CREDIT
ALLOWED
AGAINST
ALTERNATIVE 
MINIMUM TAX.—In the case of a taxable year to which 
section 26(a)(2) does not apply, so much of the credit 
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allowed under subsection (a) as is attributable to the 
Hope Scholarship Credit shall not exceed the excess 
of— 
‘‘(A) the sum of the regular tax liability (as 
defined in section 26(b)) plus the tax imposed by 
section 55, over 
‘‘(B) the sum of the credits allowable under 
this subpart (other than this subsection and sec-
tions 23, 25D, and 30D) and section 27 for the 
taxable year. 
Any reference in this section or section 24, 25, 26, 
25B, 904, or 1400C to a credit allowable under this 
subsection shall be treated as a reference to so much 
of the credit allowable under subsection (a) as is at-
tributable to the Hope Scholarship Credit. 
‘‘(6) PORTION OF CREDIT MADE REFUNDABLE.— 
30 percent of so much of the credit allowed under sub-
section (a) as is attributable to the Hope Scholarship 
Credit (determined after application of paragraph (4) 
and without regard to this paragraph and section 
26(a)(2) or paragraph (5), as the case may be) shall 
be treated as a credit allowable under subpart C (and 
not allowed under subsection (a)). The preceding sen-
tence shall not apply to any taxpayer for any taxable 
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year if such taxpayer is a child to whom subsection 
(g) of section 1 applies for such taxable year. 
‘‘(7) COORDINATION
WITH
MIDWESTERN
DIS-
ASTER AREA BENEFITS.—In the case of a taxpayer 
with respect to whom section 702(a)(1)(B) of the 
Heartland Disaster Tax Relief Act of 2008 applies for 
any taxable year, such taxpayer may elect to waive 
the application of this subsection to such taxpayer for 
such taxable year.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 24(b)(3)(B) is amended by inserting 
‘‘25A(i),’’ after ‘‘23,’’. 
(2) Section 25(e)(1)(C)(ii) is amended by insert-
ing ‘‘25A(i),’’ after ‘‘24,’’. 
(3) Section 26(a)(1) is amended by inserting 
‘‘25A(i),’’ after ‘‘24,’’. 
(4) Section 25B(g)(2) is amended by inserting 
‘‘25A(i),’’ after ‘‘23,’’. 
(5) Section 904(i) is amended by inserting 
‘‘25A(i),’’ after ‘‘24,’’. 
(6) Section 1400C(d)(2) is amended by inserting 
‘‘25A(i),’’ after ‘‘24,’’. 
(7) Section 1324(b)(2) of title 31, United States 
Code, is amended by inserting ‘‘25A,’’ before ‘‘35’’. 
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(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
(d) APPLICATION OF EGTRRA SUNSET.—The amend-
ment made by subsection (b)(1) shall be subject to title IX 
of the Economic Growth and Tax Relief Reconciliation Act 
of 2001 in the same manner as the provision of such Act 
to which such amendment relates. 
(e) TREASURY STUDIES REGARDING EDUCATION IN-
CENTIVES.— 
(1) STUDY
REGARDING
COORDINATION
WITH 
NON-TAX EDUCATIONAL INCENTIVES.—The Secretary 
of the Treasury, or the Secretary’s delegate, shall 
study how to coordinate the credit allowed under sec-
tion 25A of the Internal Revenue Code of 1986 with 
the Federal Pell Grant program under section 401 of 
the Higher Education Act of 1965. 
(2) STUDY REGARDING IMPOSITION OF COMMU-
NITY SERVICE REQUIREMENTS.—The Secretary of the 
Treasury, or the Secretary’s delegate, shall study the 
feasibility of requiring students to perform commu-
nity service as a condition of taking their tuition and 
related expenses into account under section 25A of the 
Internal Revenue Code of 1986. 
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(3) REPORT.—Not later than 1 year after the 
date of the enactment of this Act, the Secretary of the 
Treasury, or the Secretary’s delegate, shall report to 
Congress on the results of the studies conducted under 
this paragraph. 
SEC. 1005. COMPUTER TECHNOLOGY AND EQUIPMENT AL-
LOWED AS A QUALIFIED HIGHER EDUCATION 
EXPENSE FOR SECTION 529 ACCOUNTS IN 
2009 AND 2010. 
(a) IN GENERAL.—Section 529(e)(3)(A) is amended by 
striking ‘‘and’’ at the end of clause (i), by striking the pe-
riod at the end of clause (ii), and by adding at the end 
the following: 
‘‘(iii) expenses paid or incurred in 
2009 or 2010 for the purchase of any com-
puter technology or equipment (as defined 
in section 170(e)(6)(F)(i)) or Internet access 
and related services, if such technology, 
equipment, or services are to be used by the 
beneficiary and the beneficiary’s family 
during any of the years the beneficiary is 
enrolled at an eligible educational institu-
tion. 
Clause (iii) shall not include expenses for com-
puter software designed for sports, games, or hob-
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bies unless the software is predominantly edu-
cational in nature.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to expenses paid or incurred after De-
cember 31, 2008. 
SEC. 1006. CREDIT FOR CERTAIN HOME PURCHASES. 
(a) ALLOWANCE OF CREDIT.—Subpart A of part IV 
of subchapter A of chapter 1 is amended by inserting after 
section 25D the following new section: 
‘‘SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—In the case of an individual 
who is a purchaser of a principal residence during 
the taxable year, there shall be allowed as a credit 
against the tax imposed by this chapter an amount 
equal to 10 percent of the purchase price of the resi-
dence. 
‘‘(2) DOLLAR LIMITATION.—The amount of the 
credit allowed under paragraph (1) shall not exceed 
$15,000. 
‘‘(3) ALLOCATION OF CREDIT AMOUNT.—At the 
election of the taxpayer, the amount of the credit al-
lowed under paragraph (1) (after application of 
paragraph (2)) may be equally divided among the 2 
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taxable years beginning with the taxable year in 
which the purchase of the principal residence is made. 
‘‘(b) LIMITATIONS.— 
‘‘(1) DATE OF PURCHASE.—The credit allowed 
under subsection (a) shall be allowed only with re-
spect to purchases made— 
‘‘(A) after the date of the enactment of the 
American Recovery and Reinvestment Tax Act of 
2009, and 
‘‘(B) on or before the date that is 1 year 
after such date of enactment. 
‘‘(2) LIMITATION BASED ON AMOUNT OF TAX.— 
In the case of a taxable year to which section 26(a)(2) 
does not apply, the credit allowed under subsection 
(a) for any taxable year shall not exceed the excess 
of— 
‘‘(A) the sum of the regular tax liability (as 
defined in section 26(b)) plus the tax imposed by 
section 55, over 
‘‘(B) the sum of the credits allowable under 
this subpart (other than this section) for the tax-
able year. 
‘‘(3) ONE-TIME ONLY.— 
‘‘(A) IN GENERAL.—If a credit is allowed 
under this section in the case of any individual 
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(and such individual’s spouse, if married) with 
respect to the purchase of any principal resi-
dence, no credit shall be allowed under this sec-
tion in any taxable year with respect to the pur-
chase of any other principal residence by such 
individual or a spouse of such individual. 
‘‘(B) JOINT PURCHASE.—In the case of a 
purchase of a principal residence by 2 or more 
unmarried individuals or by 2 married individ-
uals filing separately, no credit shall be allowed 
under this section if a credit under this section 
has been allowed to any of such individuals in 
any taxable year with respect to the purchase of 
any other principal residence. 
‘‘(c) PRINCIPAL RESIDENCE.—For purposes of this sec-
tion, the term ‘principal residence’ has the same meaning 
as when used in section 121. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No credit shall 
be allowed under this section for any purchase for which 
a credit is allowed under section 36 or section 1400C. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) JOINT PURCHASE.— 
‘‘(A) MARRIED INDIVIDUALS FILING SEPA-
RATELY.—In the case of 2 married individuals 
filing separately, subsection (a) shall be applied 
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to each such individual by substituting ‘$7,500’ 
for ‘$15,000’ in subsection (a)(1). 
‘‘(B) UNMARRIED
INDIVIDUALS.—If 2 or 
more individuals who are not married purchase 
a principal residence, the amount of the credit 
allowed under subsection (a) shall be allocated 
among such individuals in such manner as the 
Secretary may prescribe, except that the total 
amount of the credits allowed to all such individ-
uals shall not exceed $15,000. 
‘‘(2) PURCHASE.—In defining the purchase of a 
principal residence, rules similar to the rules of para-
graphs (2) and (3) of section 1400C(e) (as in effect 
on the date of the enactment of this section) shall 
apply. 
‘‘(3) REPORTING REQUIREMENT.—Rules similar 
to the rules of section 1400C(f) (as so in effect) shall 
apply. 
‘‘(f) RECAPTURE OF CREDIT IN THE CASE OF CERTAIN 
DISPOSITIONS.— 
‘‘(1) IN
GENERAL.—In the event that a tax-
payer— 
‘‘(A) disposes of the principal residence with 
respect to which a credit was allowed under sub-
section (a), or 
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‘‘(B) fails to occupy such residence as the 
taxpayer’s principal residence, 
at any time within 24 months after the date on which 
the taxpayer purchased such residence, then the tax 
imposed by this chapter for the taxable year during 
which such disposition occurred or in which the tax-
payer failed to occupy the residence as a principal 
residence shall be increased by the amount of such 
credit. 
‘‘(2) EXCEPTIONS.— 
‘‘(A) DEATH OF TAXPAYER.—Paragraph (1) 
shall not apply to any taxable year ending after 
the date of the taxpayer’s death. 
‘‘(B) INVOLUNTARY
CONVERSION.—Para-
graph (1) shall not apply in the case of a resi-
dence which is compulsorily or involuntarily 
converted 
(within 
the 
meaning 
of 
section 
1033(a)) if the taxpayer acquires a new prin-
cipal residence within the 2-year period begin-
ning on the date of the disposition or cessation 
referred to in such paragraph. Paragraph (1) 
shall apply to such new principal residence dur-
ing the remainder of the 24-month period de-
scribed in such paragraph as if such new prin-
cipal residence were the converted residence. 
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‘‘(C) TRANSFERS BETWEEN SPOUSES OR IN-
CIDENT TO DIVORCE.—In the case of a transfer 
of a residence to which section 1041(a) applies— 
‘‘(i) paragraph (1) shall not apply to 
such transfer, and 
‘‘(ii) in the case of taxable years end-
ing after such transfer, paragraph (1) shall 
apply to the transferee in the same manner 
as if such transferee were the transferor 
(and shall not apply to the transferor). 
‘‘(D) RELOCATION
OF
MEMBERS
OF
THE 
ARMED FORCES.—Paragraph (1) shall not apply 
in the case of a member of the Armed Forces of 
the United States on active duty who moves pur-
suant to a military order and incident to a per-
manent change of station. 
‘‘(3) JOINT RETURNS.—In the case of a credit al-
lowed under subsection (a) with respect to a joint re-
turn, half of such credit shall be treated as having 
been allowed to each individual filing such return for 
purposes of this subsection. 
‘‘(4) RETURN
REQUIREMENT.—If the tax im-
posed by this chapter for the taxable year is increased 
under this subsection, the taxpayer shall, notwith-
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standing section 6012, be required to file a return 
with respect to the taxes imposed under this subtitle. 
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section with respect 
to the purchase of any residence, the basis of such residence 
shall be reduced by the amount of the credit so allowed. 
‘‘(h) ELECTION
TO TREAT PURCHASE
IN PRIOR 
YEAR.—In the case of a purchase of a principal residence 
during the period described in subsection (b)(1), a taxpayer 
may elect to treat such purchase as made on December 31, 
2008, for purposes of this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for 
subpart A of part IV of subchapter A of chapter 1 is amend-
ed by inserting after the item relating to section 25D the 
following new item: 
‘‘Sec. 25E. Credit for certain home purchases.’’. 
(c) SUNSET OF CURRENT FIRST-TIME HOMEBUYER 
CREDIT.— 
(1) IN GENERAL.—Subsection (h) of section 36 is 
amended by striking ‘‘July 1, 2009’’ and inserting 
‘‘the date of the enactment of the American Recovery 
and Reinvestment Tax Act of 2009’’. 
(2) ELECTION TO TREAT PURCHASE IN PRIOR 
YEAR.—Subsection (g) of section 36 is amended by 
striking ‘‘July 1, 2009’’ and inserting ‘‘the date of the 
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enactment of the American Recovery and Reinvest-
ment Tax Act of 2009’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to purchases after the date of the enact-
ment of this Act. 
SEC. 1007. SUSPENSION OF TAX ON PORTION OF UNEM-
PLOYMENT COMPENSATION. 
(a) IN GENERAL.—Section 85 of the Internal Revenue 
Code of 1986 (relating to unemployment compensation) is 
amended by adding at the end the following new subsection: 
‘‘(c) SPECIAL RULE FOR 2009.—In the case of any 
taxable year beginning in 2009, gross income shall not in-
clude so much of the unemployment compensation received 
by an individual as does not exceed $2,400.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
SEC. 1008. ABOVE-THE-LINE DEDUCTION FOR INTEREST ON 
INDEBTEDNESS WITH RESPECT TO THE PUR-
CHASE OF CERTAIN MOTOR VEHICLES. 
(a) IN GENERAL.—Paragraph (2) of section 163(h) of 
the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (E), 
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(2) by striking the period at the end of subpara-
graph (F) and inserting ‘‘, and’’, and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(G) any qualified motor vehicle interest 
(within the meaning of paragraph (5)).’’. 
(b) QUALIFIED MOTOR VEHICLE INTEREST.—Section 
163(h) of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new paragraph: 
‘‘(5) QUALIFIED MOTOR VEHICLE INTEREST.— 
For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
motor vehicle interest’ means any interest which 
is paid or accrued during the taxable year on 
any indebtedness which— 
‘‘(i) is incurred after November 12, 
2008, and before January 1, 2010, in ac-
quiring any qualified motor vehicle of the 
taxpayer, and 
‘‘(ii) is secured by such qualified motor 
vehicle. 
Such term also includes any indebtedness secured 
by such qualified motor vehicle resulting from 
the refinancing of indebtedness meeting the re-
quirements of the preceding sentence (or this sen-
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tence); but only to the extent the amount of the 
indebtedness resulting from such refinancing does 
not exceed the amount of the refinanced indebted-
ness. 
‘‘(B) DOLLAR LIMITATION.—The aggregate 
amount of indebtedness treated as described in 
subparagraph (A) for any period shall not exceed 
$49,500 ($24,750 in the case of a separate return 
by a married individual). 
‘‘(C) INCOME
LIMITATION.—The amount 
otherwise treated as interest under subparagraph 
(A) for any taxable year (after the application of 
subparagraph (B)) shall be reduced (but not 
below zero) by the amount which bears the same 
ratio to the amount which is so treated as— 
‘‘(i) the excess (if any) of— 
‘‘(I) the taxpayer’s modified ad-
justed gross income for such taxable 
year, over 
‘‘(II) $125,000 ($250,000 in the 
case of a joint return), bears to 
‘‘(ii) $10,000. 
For purposes of the preceding sentence, the term 
‘modified adjusted gross income’ means the ad-
justed gross income of the taxpayer for the tax-
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able year increased by any amount excluded 
from gross income under section 911, 931, or 
933. 
‘‘(D) QUALIFIED
MOTOR
VEHICLE.—The 
term ‘qualified motor vehicle’ means a passenger 
automobile (within the meaning of section 
30B(h)(3)) or a light truck (within the meaning 
of such section)— 
‘‘(i) which is acquired for use by the 
taxpayer and not for resale after November 
12, 2008, and before January 1, 2010, 
‘‘(ii) the original use of which com-
mences with the taxpayer, and 
‘‘(iii) which has a gross vehicle weight 
rating of not more than 8,500 pounds.’’. 
(c) DEDUCTION ALLOWED ABOVE-THE-LINE.—Section 
62(a) of the Internal Revenue Code of 1986 is amended by 
inserting after paragraph (21) the following new para-
graph: 
‘‘(22) QUALIFIED MOTOR VEHICLE INTEREST.— 
The deduction allowed under section 163 by reason of 
subsection (h)(2)(G) thereof.’’. 
(d) REPORTING OF QUALIFIED MOTOR VEHICLE IN-
TEREST.— 
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(1) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 61 of the Internal Revenue Code 
of 1986 is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 6050X. RETURNS RELATING TO QUALIFIED MOTOR 
VEHICLE INTEREST RECEIVED IN TRADE OR 
BUSINESS FROM INDIVIDUALS. 
‘‘(a) QUALIFIED MOTOR VEHICLE INTEREST.—Any 
person— 
‘‘(1) who is engaged in a trade or business, and 
‘‘(2) who, in the course of such trade or business, 
receives from any individual interest aggregating 
$600 or more for any calendar year on any indebted-
ness secured by a qualified motor vehicle (as defined 
in section 163(h)(5)(D)), 
shall make the return described in subsection (b) with re-
spect to each individual from whom such interest was re-
ceived at such time as the Secretary may by regulations 
prescribe. 
‘‘(b) FORM AND MANNER OF RETURNS.—A return is 
described in this subsection if such return— 
‘‘(1) is in such form as the Secretary may pre-
scribe, 
‘‘(2) contains— 
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by section 1, is amended by inserting after paragraph (22) 
the following new paragraph: 
‘‘(23) QUALIFIED MOTOR VEHICLE TAXES.—The 
deduction allowed under section 164 by reason of sub-
section (a)(6) thereof.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
PART II—ALTERNATIVE MINIMUM TAX RELIEF 
SEC. 1011. EXTENSION OF ALTERNATIVE MINIMUM TAX RE-
LIEF 
FOR 
NONREFUNDABLE 
PERSONAL 
CREDITS. 
(a) IN GENERAL.—Paragraph (2) of section 26(a) (re-
lating to special rule for taxable years 2000 through 2008) 
is amended— 
(1) by striking ‘‘or 2008’’ and inserting ‘‘2008, 
or 2009’’, and 
(2) by striking ‘‘2008’’ in the heading thereof 
and inserting ‘‘2009’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
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