The Jobs and Growth Tax Relief Reconciliation Act of 2003 ("JGTRRA", , ), was passed by the

United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...

on May 23, 2003 and signed into law by

President President most commonly refers to: *President (corporate title) * President (education), a leader of a college or university * President (government title) President may also refer to: Automobiles * Nissan President, a 1966–2010 Japanese ...

George W. Bush George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...

on May 28, 2003. Nearly all of the cuts (individual rates, capital gains, dividends, estate tax) were set to expire after 2010. Among other provisions, the act accelerated certain tax changes passed in the

Economic Growth and Tax Relief Reconciliation Act of 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 was a major piece of tax legislation passed by the 107th United States Congress and signed by President George W. Bush. It is also known by its abbreviation EGTRRA (often pronounced ...

, increased the exemption amount for the individual

Alternative Minimum Tax The alternative minimum tax (AMT) is a tax imposed by the United States federal government in addition to the regular income tax for certain individuals, estates, and trusts. As of tax year 2018, the AMT raises about $5.2 billion, or 0.4% of all ...

, and lowered taxes of

income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. Fo ...

from

dividend A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-i ...

s and capital gains. The 2001 and 2003 acts are known together as the "

Bush tax cuts The phrase Bush tax cuts refers to changes to the United States tax code passed originally during the presidency of George W. Bush and extended during the presidency of Barack Obama, through: * Economic Growth and Tax Relief Reconciliation Act o ...

Description of cuts

JGTRRA continued on the precedent established by the 2001 EGTRRA, while increasing tax reductions on investment income from

s and capital gains.

Accelerated credits and rate reductions

JGTRRA accelerated the gradual rate reduction and increase in credits passed in EGTRRA. The maximum tax rate decreases originally scheduled to be phased into effect in 2006 under EGTRRA were retroactively enacted to apply to the 2003 tax year. Also, the child tax credit was increased to what would have been the 2010 level, and "

marriage penalty The marriage penalty in the United States refers to the higher taxes required from some married couples with both partners earning income that would not be required by two otherwise identical single people with exactly the same incomes. There is a ...

" relief was accelerated to 2009 levels. In addition, the threshold at which the

alternative minimum tax The alternative minimum tax (AMT) is a tax imposed by the United States federal government in addition to the regular income tax for certain individuals, estates, and trusts. As of tax year 2018, the AMT raises about $5.2 billion, or 0.4% of all ...

applies was also increased.

Investments

JGTRRA increased both the percentage rate at which items can be

depreciated In accountancy, depreciation is a term that refers to two aspects of the same concept: first, the actual decrease of fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wear, and second, the a ...

and the amount a taxpayer may choose to expense under Section 179, allowing them to deduct the full cost of the item from their income without having to depreciate the amount. In addition, the

capital gains tax A capital gains tax (CGT) is the tax on profits realized on the sale of a non-inventory asset. The most common capital gains are realized from the sale of stocks, bonds, precious metals, real estate, and property. Not all countries impose a c ...

decreased from rates of 8%, 10%, and 20% to 5% and 15%. Capital gains taxes for those currently paying 5% (in this instance, those in the 10% and 15% income tax brackets) are scheduled to be eliminated in 2008. However, capital gains taxes remain at the regular income tax rate for property held less than one year. Certain categories, such as collectibles, remained taxed at existing rates, with a 28% cap. In addition, taxes on "

qualified dividend Qualified dividends, as defined by the United States Internal Revenue Code, are ordinary dividends that meet specific criteria to be taxed at the lower long-term capital gains tax rate rather than at higher tax rate for an individual's ordinary in ...

s" were reduced to the capital gains levels. "

Qualified dividend Qualified dividends, as defined by the United States Internal Revenue Code, are ordinary dividends that meet specific criteria to be taxed at the lower long-term capital gains tax rate rather than at higher tax rate for an individual's ordinary in ...

s" includes most income from non-foreign corporations,

real estate investment trust A real estate investment trust (REIT) is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office and apartment buildings, warehouses, hospitals, shopping cente ...

s, and

credit union A credit union, a type of financial institution similar to a commercial bank, is a member-owned nonprofit financial cooperative. Credit unions generally provide services to members similar to retail banks, including deposit accounts, provisi ...

and

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

"dividends" that are nominally

interest In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distin ...

Legislative history

Final House vote: Final Senate vote:

Tax bracket comparison

The tax cuts enacted by this legislation were retroactive to January 1, 2003 and first applied to taxes filed for the 2003 tax year. These individual rate reductions are scheduled to sunset on January 1, 2011 along with the Economic Growth and Tax Relief Reconciliation Act of 2001 unless further legislation is enacted to extend or make permanent its changes. This comparison shows how the ordinary taxable income brackets for each

filing status Under United States federal income tax law, filing status determines which tax return form an individual will use and is an important factor in computing taxable income. Filing status is based on marital status and family situation. There are ...

were changed.

Single

Married filing jointly or qualifying widow or widower

Married filing separately

Head of household

References

External links

Full text of the Act

Summary of the Act(pdf file)

Senate Roll Call Vote – Jobs and Growth Tax Relief Reconciliation Act

Effective Federal Tax Rates Under Current Law, 2001 to 2014
Prof. John Wachowicz at the

University of Tennessee The University of Tennessee (officially The University of Tennessee, Knoxville; or UT Knoxville; UTK; or UT) is a public land-grant research university in Knoxville, Tennessee. Founded in 1794, two years before Tennessee became the 16th state ...

{{George W. Bush United States federal taxation legislation Acts of the 108th United States Congress United States fiscal cliff