• limited to gross tax, and there is no carryover of any excess
• allowed for many activities deemed socially desireable

1. $1,000 child credit for each qualifying children (as defined by dependency rules) under the age of 17.
2. includes children or gandchildren
3. credit is phased out for AGI in excess of $75,000/$110,000 by $50 for every $1,000 over limit
4. refundable to the extent of 15% of the TPer's earned income in excess of $3,000 (2010 and 2011)

1. maximum credit of $2,500 per year for EACH eligible student
2. 100% of the first $2,000 and 25% of next $2,000 of qualified expenses
3. phased out for TP with AGI over $80,000/$160,000 completely over a range of $10,000/$20,000
4. can be claimed against AMT and is 40% refundable

• TP, spouse, or any dependent TP enrolled at least half-time in an institution of higher education
• must be part of a degree program

• nondeductible tuition, academic fees, and course material expenses incurred in student's first four years of post-secondary education
• must relate to an academic period beginning in the current tax year, or the first 3 months of the next tax year

1. credit allowed up to a maximum of $2,000 per TP per year
2. computed as 20% of $10,000 of qualified educational expenses incurred for TP, spouse, or dependent
3. phased out for AGI in excess of $51,000/$102,000 completely over a range of $10,000/$20,000

• does NOT need to be at least half-time 
• does NOT need to be part of degree program

1. credit of 50% for voluntary contributions to IRA and qualified retirement accounts
2. maximum of $1,000 tax credit

1. TP must be 18 or older, not a full-time student, can't be claimed as a dependent on another return, and can't receive a distribution from the account
2. must have AGI below $17,000 if single, $25,500 for head of household, and $34,000 if married-joint (AGI phase-outs above these limits are indexed for inflation)

1. person needing care must life with the TP for more than half of the year
2. qualifying child or dependent under age of 13 automatically qualifies (residency test doesn't need to be satisfied)
3. dependent or spouse who is incapable of self-care (physical or mental disability) and lives in house more than 1/2 of the year

1. multiply credit percentage (max of 35% for AGI less than $15,000) X eligible expenses (max is lessor of (a) $3,000 (or $6,000 if more than one individual qualifies for care) or (b) earned income of lesser-earning spouse if married)
2. credit percentage phases out 1% for each $2,000 increment in AGI above $15,000, but 20% is minimum (TP with AGI over $40,000 get 20% of the $3,000)

1. adoption credit for child of speical needs is 100% of the max allowed credit, regardless of actual expenses
2. Amounts are indexed for inflation
3. adoption credit is now refundable

• TP or spouse must be 65 or totally disabled
• 15% of difference between flat amount (5,000 for one spouse/$7,500 for two) and income (certain types of retirement pay plus one-half of AGI over $7,500/$10,000)

1. alternative motor vehicle credit
2. credit for new qualified plug-in electric drive motor vehicles

• for purchases after February 17,2009 and before 2012, a plug-in conversion credit is added that is 10% of the cost of the vehicle (max cost of $40,000)
• also allowed against AMT

1. credit #1: limited to $5,000 for passenger cares and trucks, and $7,500 for large commercial vehicles (subject to phase out based on number of vehicles purchased in year)
2. credit #2: qualified and purchased Feb 17, 2009-2012: credit is 10% of cost and is limited to $2,500

1. credit % of earned income is 7.65% for no qualifying children, 34% for one, and 40% for two or more (also 45% for three or more in 2009-2012)
2. phase-out indexed for inflation
3. disallowed if disqualified income (interet, dividends,tax exempt interest and other investment income) exceeds $3,150 (2011)
4. TP between 25-64 can qualify if can't be claimed by another form as dependent
5. refundable credit

1. refundable tax credit equal to 80% of amount paid by TP for coverage under COBRA continuation health coverage and various state-based group health coverage options
2. workers terminated 9/1/08-3/31/10 receive a subsidy from government of 65% of COBRA health coverage continuation payments for up to 9 months (TP with AGI > $125,000/$250,000 don't qualify)

1. equal to 10% of amounts paid or incurred for energy-efficient building envelope components + amount paid for certain residential energy property expenditure
2. credit limited to $500 in 2011
3. total credit for 2009 + 2010 limited to $1,500
4. nonrefundable and can offset AMT

lower of...

• foreign tax paid

or

• proportion of US tax allocable to foreign sourced income

1. =foreign tax paid-tax credit limitation
2. can be carried back 1 year and forward up to 20 years

1. claim foreign tax as itemized deduction
2. exclude income earned (in excess of housing costs) while a bona fide resident in a foreign country.  subject to maximum exclusion ($92,900 for 2011) if TP is physically present in foreign country for at least 330 days in any 12 consecutive months

• allows a credit equal to the lower of (a) 6.2% of earned income or (b) $400/$800
• refundable but phased out at higher income levels
• applies for 2009 and 2010 and implemented by reducing withholding from an employee's pay

1. designed to subsidize certain activities
2. credit is limited to "net regular" tax liability LESS 25% of net regular liability over $25,000
3. unused credits carried back one and forward 20 years 
4. credits can't reduce the regular tax liability below "tentative" tax requires to be paid under AMT

1. may be carried back five years
2. may be used to offset AMT

1. expenditures to rehabilitate property placed in servie before 1936 are eligible for a 10% credit
2. expenditures to rehabilitate certified historic structures are eligible fora 20% credit
3. adjusted basis of property is reduced by amount of credit
4. rehabilitation credit is recaptured if building is held less than 5 years (20% recapture per year)

• 20% credit on incremental research expenditures
• doesn't include research for commercial production, surveys, or social science research
• TP may elect alternative simplified research credit instead (=14% of excess qualified research expenses over 50% of average research expenses for last 3 years)

1. energy credits for certain solar and geothermal property, renewable energy facilities, and wind produced energy
2. contractors credit for energy efficient homes
3. dissability access, low-income housing, enhanced oild recovery, orphan drugs, etc.