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The bipartisan HIRE Act is the result of an effort to create jobs in a targeted and relatively inexpensive ($17.6 billion – small by Washington standards) manner. Section 179 was one of only four basic provisions included in the original bill – a testament to the strong support of the business community, particularly small- and medium-sized manufacturers.
Section 179 allows a business to expense the first $250,000 of capital expenditures up to $800,000. After total CAPEX purchases exceed $800,000, the incentive begins phasing out dollar for dollar. This tax break can be a powerful one, especially at a time when orders definitely could use a boost.
In addition to the Section 179 expensing, The HIRE Act also includes tax credits for employers who hire new workers; Build America Bonds, which allow state and local governments to lower their borrowing costs; and a one-year extension of funding for transportation programs in the Surface Transportation Act. The new law does NOT include extension of 50% bonus depreciation which expired at the end of 2009. AMT continues to strongly advocate for its extension for 2010.