Question: For what year will these tax cuts be effective?

[TwixVoy]

I am curious - for these proprosed tax cuts of $500 for individuals and $1000 for couples - what tax year will these be effective for?

Is it not too late to make them effective for the 2008 tax year? (people have already started to file taxes) If it is for tax year 2009.... won't it be too little too late?

[FrenchieCat]

1. The Tax cuts may be proposed for two years........

Both 2008 and 2009.

...under what Mr. Obama during his campaign called the Making Work Pay credit, worth up to $500 for individuals and $1,000 for families. The Obama campaign estimated that about 150 million Americans making less than $200,000 would qualify, including those who make too little to pay federal income taxes but would receive a check that would offset Social Security and Medicare payroll taxes.

Mr. Obama’s advisers said Sunday that they were searching for a way to get that credit into Americans’ pockets quickly to help stimulate spending, but would not duplicate the rebate checks sent last year as part of an economic package signed by President Bush. Instead, they said, they were discussing making the credit retroactive to the 2008 tax year and adjusting withholding formulas so that paychecks would start reflecting that right away.
http://www.nytimes.com/2009/01/05/us/politics/05spend.html?_r=1&hp=&pagewanted=all

[DJ13]

2. Since its from paycheck witholdings spread out over 12 months

....its too little to worry about.

[GOP_refugee]

3. Tax cuts

They'd apply to 2009, but as the other poster pointed out, since they would affect withholding, they would take effect immediately.

The real outrage here IMO is the business tax cuts. Under current IRS rules, businesses may carry a net operating loss back to the two years immediately preceding the current one, for the purpose of obtaining a tax refund on taxes previously paid.

Corporations use this loophole to "claw back" previously paid taxes from the government, when they lose money. However, the proposed change in "carry-back" tax losses (or carryover, I suppose) would now extend to five years, a huge bonanza for money losing banks, big homebuilders, and others.

This provision was specifically lobbied hard by the National Association of Homebuilders (NAHB) and other lobbyists. They tried to slip this in one of the stimulus packages last year, but were defeated by grass-roots organizers.

Please also check out this site, alleging that one of the major public homebuilders (Lennar) basically operated a Ponzi scheme a la Enron:

http://www.lenn-ron.com/

Allowing these special interests to effectively loot the treasury to prop up their zombie companies would be a horrendous way to start the Obama administration. Please consider calling or writing your congress critter and tell them to please cut this out NOW.