Congress Extends Housing Tax Credit

Congress gave final approval Thursday for an additional $24 billion to help the jobless and support the housing market. According to the Washington Post article below, there are three main provisions to the bill being sent to the President to sign:
1) Unemployment Benefits. The bill would prolong benefits for at least 14 weeks for people out of work. The jobless in more than two dozen states where unemployment rates exceed 8.5 percent would receive up to 20 additional weeks of benefits. With more than 15 million Americans unemployed, a third of whom have been out of work for more than six months, benefits for more than 1 million people would have ended without the extension, according to the National Employment Law Project, a nonpartisan group that tracks the issue.

2) Housing Tax Credit. Under the housing program, people buying a home for the first time in three years would receive an $8,000 tax credit if they sign a contract by April 30 and close by June 30. The timing is more flexible for military families who have been deployed overseas for 90 days or more in 2008 or 2009. They would have until April 30, 2011, to sign a contract. Homeowners who are buying a new primary residence would be eligible for a $6,500 tax credit beginning Dec. 1 if they owned their home for five consecutive years in the previous eight. To qualify, the home must be no more than $800,000. The program also restricts eligibility to individuals who make no more than $125,000 annually and couples who make no more than $225,000. Anyone who collects the tax credit but sells the home within three years of buying it must return the refund. The housing program is estimated to cost $10.8 billion.

3) Tax Refunds for Business Losses. Another provision allows businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years. The hope is that those refunds will allow businesses more flexibility to retain employees or make new investments to bolster the economy in the future.

The Washington Post