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Tax Incentives

President Obama signed "The American Recovery and Reinvestment Act of 2009" into law on February 17, 2009. The law includes a new consumer tax deduction for State and local sales and excise taxes paid to purchase a motor vehicle during 2009.

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 Provides consumers a new tax deduction on their 2009 Federal income taxes for "qualified motor vehicle taxes".

- Qualified motor vehicle taxes include any State or local sales or excise tax imposed on the purchase of a qualified motor vehicle.

- Qualified motor vehicles include passenger automobiles or light trucks with a weight rating of not more than 8,500 pounds.

- Applies to NEW vehicles only.

- Deduction allowed for non-itemizers.

- Limitation on Vehicle Price: limited to the tax on up to $49,500 of the purchase price of a qualified motor vehicle.

- Income Limitation: Phased out for taxpayers with modified adjusted gross income between $125,000 and $135,000 ($250,000 and $260,000 in the case of a joint return).

- Effective Date: Purchases on or after February 17, 2009, and before January 1, 2010.

Customers with questions related to their particular tax situation should be advised to consult with a financial adviser.