Publication 3991 (5/2002), Highlights of the Job Creation and Worker Assistance Act of 2002

Introduction

All of the changes discussed in this publication resulted from the Job Creation and Worker Assistance Act of 2002. This publication highlights tax law changes that took effect retroactively for 2001 and others that take effect in 2002 and later years. The chapters are divided into separate sections based on when the changes take effect.

For example, this publication covers the following topics.

Tax benefits for the area of New York City damaged in terrorist attacks on September 11, 2001.
New deduction available for educator expenses.
Limit on the use of the non-accrual experience method of accounting.
Pension changes such as the new tax credit for certain pension plan startup costs, an increased SEP contribution limit, figuring 403(b) catch-up contributions, and a provision for deemed IRAs.
Extension of the welfare-to-work credit and work opportunity credit.
New 5-year carryback rule for net operating losses (NOLs).

See the discussion of each topic for more information.

Certain changes had a major effect on two of the publications we issued for 2001. We published supplements to those two publications and they have been included in this publication as follows.

Chapter 4 contains the supplement to Publication 463, Travel, Entertainment, Gift, and Car Expenses. This discusses the increase in the amount of depreciation deduction for certain automobiles.
Chapter 5 contains the supplement to Publication 946, How To Depreciate Property. This discusses the special depreciation allowance for property acquired after September 10, 2001.

Adjusting your withholding or estimated tax payments for 2002. If your tax for 2002 will be more or less than your 2001 tax, you may need to adjust your withholding or estimated tax payments accordingly. If your tax will decrease, you can get the benefit of lower taxes throughout the year. If you will owe more tax, you can avoid a penalty when you file your tax return.

See the following table for forms and publications that will help you adjust your withholding or estimated tax payments. See chapter 6 for information on ordering forms and publications.

To adjust your....	Get Form...	And Publication...
Withholding	W–4, Employee's Withholding Allowance Certificate	919, How Do I Adjust My Tax Withholding?
Estimated tax payments	1040–ES, Estimated Tax for Individuals	505, Tax Withholding and Estimated Tax

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1–800–THE–LOST (1–800–843–5678) if you recognize a child.

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Publication 3991 - Introductory Material

Introduction