Jobs and Growth Tax Relief Reconciliation Act of 2003

Signed into law by President Bush on May 28, 2003.

Three key provisions of the Act relate to financial institutions and their shareholders:

	First-year bonus depreciation increase

• The first-year bonus depreciation deduction jumps up to 50% from 30% for eligible property acquired and put into service after May 5, 2003 and before January 1, 2005.
• Bonus depreciation expense continues to apply only to brand new property.

	Section 179 expense maximum increase

• The amount of eligible property that may be deducted immediately by small businesses in increased to $100,000 from $25,000 for 2003 through 2005.
• The amount of property qualifying for this immediate write-off begins to phase out at $400,000, as opposed to $200,000 before.

	Reduction in tax rates on dividends

• Qualified dividend income received by an individual will be taxed at a maximum rate of 15% for most taxpayers in 2003 through 2008.
• The 15% rate is effective for dividends received in tax years beginning after 2002.
• Lower income individuals will be subject to a new 5% rate.
• The 5% rate is effective through December 31, 2007. For 2008, the rate falls to 0%.
• In 2009, the old, or pre-JGTRRA rates resume.
• Certain types of dividend income are specifically excluded from the definition of qualified dividend income.

For more information on the Jobs and Growth Tax Relief Reconciliation Act of 2003, click the image below.

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