House and Senate negotiators reached an agreement on the American Recovery and Reinvestment Act (H.R. 1) on February 11. The final version is expected to cost $789 billion with 35% allocated to tax cuts. A formal vote is expected in the House by February 12, with Senate approval to follow.

The tax title in the Senate bill, like the version passed by the House on January 28, includes the Making Work Pay credit, enhancements to the child tax credit and first-time homebuyer credit, taxpayer-friendly changes to many energy incentives, extensions of 2008 bonus depreciation and increased Code Sec. 179 expensing along with a with a five-year carryback of net operating losses, state and local government relief, and more. However, the Senate bill overall is more generous than the House on these tax cuts. The Senate also added an alternative minimum tax (AMT) patch, as well as a temporary tax incentive for purchasers of new motor vehicles, parity for transit benefits, new curbs on executive compensation for firms receiving TARP funds, and additional incentives.

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