What's New for 2009(p6)

You may be able to take the EIC if:

• A child lived with you and you earned less than $40,295 ($43,415 if married filing jointly), or
• A child did not live with you and you earned less than $13,440 ($16,560 if married filing jointly).

The maximum AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you. The maximum investment income you can have and still get the credit has increased to $3,100.

You may be able to take an IRA deduction if you were covered by a retirement plan and your 2009 modified AGI is less than $65,000 ($109,000 if married filing jointly or qualifying widow(er)). If your spouse was covered by a retirement plan, but you were not, you may be able to take an IRA deduction if your 2009 modified AGI is less than $176,000.

A noncustodial parent claiming an exemption for a child can no longer attach certain pages from a divorce decree or separation agreement instead of Form 8332 if the decree or agreement was executed after 2008. The noncustodial parent will have to attach Form 8332 or a similar statement signed by the custodial parent and whose only purpose is to release a claim to an exemption.

The following changes to the definition of a qualifying child apply to years after 2008.

• Your qualifying child must be younger than you.
• A child cannot be your qualifying child if he or she files a joint return, unless the return was filed only as a claim for refund.
• If the parents of a child can claim the child as a qualifying child but no parent so claims the child, no one else can claim the child as a qualifying child unless that person's AGI is higher than the highest AGI of any parent of the child.
• Your child is a qualifying child for purposes of the child tax credit only if you can and do claim an exemption for him or her.

The AMT exemption amount is decreased to $33,750 ($45,000 if married filing jointly or a qualifying widow(er); $22,500 if married filing separately).

The allowance of the following personal credits against the AMT has expired.

• Credit for child and dependent care expenses.
• Credit for the elderly or the disabled.
• Education credits.