AMT patch.  Only the Senate bill included the one-year AMT “patch,” without which millions more people would have been hit with the dreaded alternative minimum tax for 2009. This version survived; the patch will be in place for 2009.

New credit for workers. Both bills contained a new refundable tax credit, which in the final version has been reduced to 6.2% of earned income up to a maximum credit of $400 for individuals and $800 for working families. The credit starts to phase out at income levels (AGI) above $75,000 ($150,000 for joint filers). (In the earlier versions, the maximum credit was $500 for singles or $1,000 for couples.) The credit, which will apply for 2009 and 2010 only, can be claimed as a reduced amount of income tax wage withholding, or through a credit on a tax return.

Economic recovery payments. While not technically a tax provision, only the Senate bill had a one-time payment of $300 for retirees, disabled individuals, Social Security beneficiaries, SSI recipients, and veterans receiving veterans’ disability compensation and pension benefits.  Now, it’s $250 instead of $300, with an analogous provision to give the same amount to certain government retirees who are not eligible for Social Security benefits. Any amount received under this provision reduces the amount available under the above workers’ credit.

New education tax credit.  Both the Senate and House bills expanded the HOPE education tax credit for 2009 and 2010, making it available for four years of post-secondary education instead of only two at a rate of up to $2,500 of the cost of tuition and related expenses per year (100% of the first $2,000 of expenses and 25% of the next $2,000). The final version also makes 40% of the credit (i.e., a maximum of $1000) refundable. The credit phase-out threshold also has increased to over $80,000 ($160,000 for joint filers), making it more available than before to higher income taxpayers.

Unemployment compensation exclusion. Only the Senate bill provides a temporary suspension of federal income tax on the first $2,400 of unemployment benefits received in 2009.  This provision also survived.