Homebuyer Credit & Jobless Benefits Extended (H.R.3548)
November 6, 2009 by Jim
="http://www.bargaineering.com/images/in_posts/stimulus-check-angled.jpg" alt="Stimulus!">In the last few months, there have been two big “stimulus” related items discussed in the House and Senate. The first was talk of extending the first time homebuyer credit in both time (when you could use it) and scope (who qualified). The second was about extending unemployment benefits by an additional 13 weeks.Well, it turns out both are going to become a reality as the Senate passed H.R.3548 – Worker, Homeownership, and Business Assistance Act of 2009 two days ago. The House passed their version in late September and just yesterday agreed to the Senate amendment to the bill (this is the “marrying” up part). The bill is on its way to the White House, if it hasn’t been signed already.
Homeownership Credits
The last homeownership stimulus bill created an $8,000 tax credit for first time homebuyers. In addition to adding a $6,500 tax credit, the income limits have been raised to $125,000 for individuals and $225,000 for couples. The current limits are $75,000 and $150,000. Finally, if you sell the home or it is no longer your primary residence within three years of purchase then you must repay the credit.
The homebuyer tax credits:
- $8,000 tax credit: If you are a first time homebuyer, you can get an $8,000 tax credit for purchasing a home. The claim deadline will be extended to April 30th, 2010, from the existing deadline of November 30th.
- $6,500 tax credit: If you already own a home and have lived in it for at least five of the last eight years, you can get a $6,500 tax credit for purchasing a home.
Unemployment Benefits
Unemployment benefits will be extended an extra 14 weeks for individuals who have already exhausted their benefits or will exhaust them before the end of the year. If you live in a state where the unemployment rate is above 8.5%, then you will receive an additional 20 weeks of benefits. According to the Bureau of Labor and Statistics, the following states have unemployment rates above 8.5%:
- MAINE – 8.5%
- IDAHO – 8.8%
- PENNSYLVANIA – 8.8%
- NEW YORK – 8.9%
- WEST VIRGINIA – 8.9%
- ARIZONA – 9.1%
- MISSISSIPPI – 9.2%
- MASSACHUSETTS – 9.3%
- WASHINGTON – 9.3%
- MISSOURI – 9.5%
- INDIANA – 9.6%
- NEW JERSEY – 9.8%
- GEORGIA – 10.1%
- OHIO – 10.1%
- ILLINOIS – 10.5%
- TENNESSEE – 10.5%
- ALABAMA – 10.7%
- NORTH CAROLINA – 10.8%
- KENTUCKY – 10.9%
- FLORIDA – 11.0%
- DISTRICT OF COLUMBIA – 11.4%
- OREGON – 11.5%
- SOUTH CAROLINA – 11.6%
- CALIFORNIA – 12.2%
- RHODE ISLAND – 13.0%
- NEVADA – 13.3%
- MICHIGAN – 15.3%
Business Assistance
If you’re wondering what the business assistance part of the Worker, Homeownership, and Business Assistance Act of 2009 is, even though it probably won’t affect you, you’ll be happy to learn that your local mom and pop store can deduct losses for 2008 and 2009 from profits in the five previous profitable years, increased from the last two years. Actually, any business can do this, not just “small” businesses.
How We’re Paying For This
For the fiscally conservative, you might be wondering how we’re going to pay for this. Extension of the homebuyer’s credit is going to cost around $11 billion and the business assistance will cost around $10.4 billion, according to the New York Times. Congress will pay for that portion of the bill by delaying a tax break for multinational corporations (it involves their worldwide interest expense), which will save around $20.1 billion. As for unemployment, otherwise known as jobless benefits, it will cost $2.4 billion and be paid by extending a $14/worker surcharge on employers into 2011 (which, by the way was created 30 years ago as a temporary measure… funny huh?).
(Photo: brapps)
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