Bill also provides tax relief for businesses that are struggling
November 4, 2009
Washington, D.C. – Led by Nevada Senator Harry Reid, the U.S. Senate today passed a bill that will extend unemployment benefits, the Homebuyer Tax Credit, and tax relief for struggling businesses.
“These additional 14 weeks of benefits will allow Nevadans looking for work to pay the bills, support their families, and put food on the table,” Reid said. “I’m also pleased that we successfully extended the homebuyer tax credit to continue this important incentive that is helping to stabilize the housing market. This amendment is a win across the board for Nevada and the country and I’m grateful that Senator Baucus and I were able to include it in the bill.”
Summary of Reid-Baucus Amendment
Extended Unemployment Benefits
• Provides unemployed workers in all states who have exhausted benefits with an additional 14 weeks of benefits.
• Authorizes an additional 6 weeks of benefits for workers in high unemployment states (those with unemployment rates of 8.5% or higher).
• These benefits are fully offset by extending the Federal Unemployment Tax (FUTA) surtax, which otherwise would expire at the end of this year, through June 30, 2010.
• Extends the $8,000 credit through June 30, 2010 (must have binding contract by April 30, 2010).
• Expands the credit (capped at $6,500) beyond first-time homebuyers to those who have owned a home for five consecutive years within the previous eight years.
• Increases the dollar limits for eligibility for both credits from $75,000 for singles and $150,000 for married couples to $125,000 for singles and $225,000 for married couples.
• Limits the credits to homes costing $800,000 or less.
• Waives repayment of the credit for Members of the Armed Forces and others on sent away from home on extended duty.
• Extends the credit for an additional year for Members of the Armed Forces and others away from home on extended duty.
• The proposal adds an age requirement, requires corroborating information to be filed with a return claiming the credit, and gives the IRS greater authority to deny the credit based on information reported by the taxpayer on prior returns.
Qualified Military Base Realignment and Closure Payments
• Clarifies that the payments under this program added as part of the American Recovery and Reinvestment Act (ARRA) are not taxable income to the recipient.
• This treats the ARRA payments in the same manner as payments.
Net Operating Losses
• Allows business losses incurred in 2008 or 2009 to be used to recoup taxes paid in prior five years.
• Taxpayers can use 100% of such losses to carry back to prior years.
• Losses carried back to the fifth prior year are limited to offsetting only 50% of that year’s income.
• Delays implementation of worldwide allocation of interest by seven years.
• Increases the penalties for failure to file partnership and S Corporation returns from $89 to $195.