A summary of the legislation passed by Congress and sent to
the President for his signature is as follows:
- The 2012 rates for Taxable incomes below $450,000 ($400,000 if single) have been permanently extended. The top bracket was 35% over $388,350 (married). It will now be $388,350 - $450,000. Over $450,000 will be 39.6%
- The capital gain and qualified dividend rate will remain 15% for taxable incomes below $450,000 ($400,000 if single) and will increase to 20% for taxable incomes above $450,000.
- The Alternative Minimum Tax rate will permanently adjust the income exemption levels for inflation.
- Itemized deductions will be limited to 3% of adjusted gross income above specified thresholds beginning at $300,000 ($250,000 is single) but not more than 80 percent.
- The estate tax exemption level of $5,120,000 has been permanently extended and will be indexed to inflation for future years. The current estate tax rate of 35% is increased to 40%.
- The scheduled 27% cut in reimbursement for Medicare services is extended for one year.
- The extended benefits for long-term unemployed are extended for one year.
- The dreaded automatic and blunt spending cuts to defense and non defense programs have been extended for two months. The cuts, if left in place, would have reduced spending by $110B.
- Several other miscellaneous credits including Child tax credit and Earned income tax credit were extended for 5 years.
