On May 10, the House approved, 244-185, the conference report for a $70 billion tax bill (H.R. 4297) that extends a number of expiring provisions in the 2003 tax law (P.L. 108-27). The Senate approved the measure, 54-44, on May 11. It will now go to the White House to be signed into law by President Bush.
H.R. 4297 extends for one year alternative minimum tax (AMT) relief that was included in the 2001 Economic Growth and Tax Relief Reconciliation Act (P.L. 107-16). Under the bill, the AMT exemption is increased to $42,500 for single taxpayers, $62,550 for married couples, and $31,275 for married individuals who file separate returns.
Beginning in 2010, the measure eliminates the income limits on converting a traditional individual retirement account (IRA) to a Roth IRA and also allows married taxpayers who file separate returns to convert their accounts to Roth IRAs. The bill also extends the reduced tax rates on capital gains and dividends for two years through 2010.
The conference report for H.R. 4297 does not include an extension of the work opportunity tax credit and welfare-to-work tax credit. The measure also does not include an “above-the-line” tax deduction for teachers for the first $250 of out-of-pocket spending on school supplies. Congress is expected to include both provisions in another tax bill later this year.