Three Tax Cuts That Are Not Extended

Although the Bush tax cuts were extended for another two years, some tax incentives were not extended because they weren’t part of the Bush tax cuts. They fall into the one-time stimulus category.

Residential Energy Tax Credit

The Residential Energy Property Credit provides a 30% tax credit of up to $1,500 over a two-year period (2009 and 2010) if you make energy efficiency improvements to your home. These include insulation, exterior windows, heating, and air conditioning. The improvement must be placed into service by December 31, 2010.

This increased tax credit came to us in 2009. It’s not extended to 2011 or beyond.

Increased standard deduction for property tax

In 2008 and 2009, people not itemizing deductions were able to take an extra $500 or $1,000 in standard deduction for property tax paid. It hasn’t been extended to 2010 or beyond.

$250 one-time payment to Social Security recipients

In 2008 almost everybody, working or not, except higher income folks, got $300/person in Economic Stimulus Payment.

In 2009, those who work, except higher income folks, got a $400/$800 Making Work Pay tax credit. Most Social Security recipients and retirees from veterans and railroad retirement programs received a one-time $250 Economic Recovery Payment.

In 2010, most workers will still get the $400/$800 Making Work Pay tax credit but there won’t be a $250 for retirees. There’s a $250 rebate for retirees who hit the Medicare prescription drugs donut hole. That’s separate; no everybody will get it.

In 2011, Making Work Pay is replaced by a more generous (to most) 2% payroll tax holiday. No $250 for retirees either.

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  1. KD says

    Me not liking this tax cut bill. Making work pay gone, and increased standard deduction for property tax gone. Add the 2% payroll tax holiday, and I still come out ahead but not as much as I would like Just kidding. 🙂

  2. AN says

    Is “Residential Energy Tax Credit” a deduction allowed under AMT? In an earlier post you mentioned: AGI minus deductions allowed under AMT (mortgage interest and charity donations).
    If one is already being hit with AMT, does the “Residential Energy Tax Credit” matter?

  3. William S. McLaughlin says

    I have a lot of non retirement stocks. I understand they get marked to market when I die, so my beneficieries have a cost basis that reflects current market. Can my Trustee, rather that distribute stock in kind, sell the marketable securities and distribute the cash more easily without losing the tax benefit of mark to market? Thanks, W. S. McLaughlin

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