Highlights of the 11-year, $1.35 trillion tax relief package debated by the Senate:
--New 10 percent tax rate created retroactive to 2001. Applies to first $6,000 of taxable income for single people, $12,000 for married couples filing jointly.
--Other rates drop 1 percentage point each in 2002, 2005 and 2007. Rates drop from 39.6 percent to 36 percent; 36 percent to 33 percent; 31 percent to 28 percent; 28 percent to 25 percent.
--15 percent rate remains the same.
--Income limits on itemized deductions adjusted upward in 2009.
--Personal exemption phase-out repealed in 2009.
--Child credit rises from $500 to $600 effective in 2001, meaning it could be claimed on next year's tax forms. Rises in $100 increments to $1,000 by 2010. Income limits stay the same.
--Taxpayers earning more than $10,000 could claim a credit of 15 percent of earnings above that income level. They cannot claim the credit now.
--Standard deduction for married couples gradually raised so that it is equal to twice that of single taxpayers. If in effect this year, the deduction would be $9,100 instead of $7,600 for a married couple.
--15 percent tax bracket gradually enlarged so it applies to more of a married couple's income, equal to twice that of singles. If fully in effect this year, the lowest tax rate would apply to $54,100 of a couple's income instead of $45,200.
--Income limit for earned income tax credit expanded by $3,000.
--Tax repealed in 2011.
--Top 55 percent rate immediately dropped to 50 percent, eventually to 45 percent.
--Current $675,000 individual exemption raised to $1 million in 2002, $2 million in 2004, $3 million in 2006, $4 million in 2010.
--Tax retained on certain gifts but rate reduced to 40 percent.
--Tax-favored contribution limits for individual retirement accounts and Roth IRAs gradually raised from $2,000 to $5,000. No change in income limits.
--Tax-deferred contribution limits for 401(k)-type plans gradually increased from $10,500 to $15,000.
--Lower-income people get credit for of half of contributions up to $2,000.
--Maximum $5,000 deduction for higher education tuition lowered to $2,000 for incomes between $130,000 and $160,000. Phases out above that level.
--Limitation on deductibility of student loan interest removed.
--Contribution limit for tax-favored education savings accounts raised from $500 to $2,000.
Alternative Minimum Tax
--Child tax credit permanently allowed to be claimed against AMT.
--AMT exemption amount increased by $6,000 for married couples filing jointly, by $3,000 for single taxpayers, from 2002 through 2004.