The Tax Relief, Unemployment, Insurance Reauthorization and Job Creation Act of 2010 (“Tax Relief Act”), signed by President Obama on December 17, 2010, deferred the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”) sunset provisions from after December 31, 2010 to after December 31, 2012. As a result, the noncorporate ordinary income tax rates of 35 percent, 33 percent, 28 percent, 25 percent, 15 percent and 10 percent continue through December 31, 2012.

Under EGTRRA, the maximum capital gains rate for noncorporate taxpayers on capital gains other than on collectibles and unrecaptured section 1250 gains was 20 percent. The Jobs and Growth Tax Relief Reconciliation Act of 2003 (“JGTRRA”) reduced the maximum 20 percent capital gain rate to 15 percent and applied a 15 percent rate to qualified dividends (in lieu of ordinary income rates) for noncorporate taxpayers. Although the JGTRRA rates were scheduled to expire for 2009, the sunset was extended to years after 2010 by the Tax Income Prevention and Reconciliation Act of 2005 (“TIPRA”). The Tax Relief Act also deferred the TIPRA sunset provision from after December 31, 2010 to after December 31, 2012. As a result the noncorporate taxpayer maximum capital gains rate on capital gains other than collectibles and unrecaptured Section 1250 gains, and the rate on qualified dividends continues to be 15 percent through December 31, 2012. These rates also apply for alternative minimum tax purposes.