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 Worker, Homeownership, and Business Act of 2009 (H.R.3548)
November 10, 2009
Payne, Nickles & Company
The Worker, Homeownership, and Business Assistance Act of 2009, which was signed by President Obama on 11/6/09, will provide relief to both individuals and businesses. The bill provides assistance to individuals by extending unemployment insurance as well as the homebuyer credit. It will aid struggling businesses by extending the 5 year NOL carryback and expanding it to include larger businesses with more than $15 million in gross receipts.
First-time homebuyers will now have until April 30, 2010 to sign a purchase agreement and must close on the home by June 30, 2010. The amount of the credit will still be 10% of the purchase price, up to a maximum of $8,000. The credit was originally set to expire on November 30, 2009. The definition of first-time homebuyer remains the same, so those who have not owned a home in the 3 years prior to purchase will still qualify. The credit will be phased out for individuals with modified AGI between $125,000 and $145,000 ($225,000 and $245,000 for joint filers).
One of the other major changes in this bill is an additional $6,500 credit that will apply to those who are not first time home buyers and have owned their current home for at least 5 of the last 8 years. To qualify, they must have signed a purchase agreement by April 30, 2010 and must close on the home by June 30, 2010. Please note that this credit is not retroactive. Those purchasing a home prior to Nov. 6, 2009 will not qualify. The purchase price of the home must be $800,000 or less. The credit is phased out at the same AGI limits as the first-time homebuyer credit.
The bill also includes an extension of unemployment benefits for an additional 14 weeks, or 20 weeks for those who live in states with unemployment rates of 8.5% or higher.
Finally, the bill provides relief to struggling businesses by extending the 5 year Net Operating Loss carryback. Any business, regardless of size or volume, would be able to claim refunds by carrying back losses incurred in either 2008 or 2009 to use up against available income in the five prior years. They will be able to offset 50% of the income from the fifth prior year and 100% of income from the four previous years. The NOL must be incurred in years ending after December 31, 2007 and beginning before January 1, 2010. Small businesses that already elected to carry 2008 NOLs back 3, 4, or 5 years under the American Recovery and Reinvestment Act would also be able to carry back losses under the new law.
If you have any questions about how these new rules apply to your situation, please contact us at cpas@pncpa.biz.
Treasury Circular 230 Disclosure
Unless expressly stated otherwise, any federal tax advice contained in this communication is not intended or written to be used, and cannot be used or relied upon, for the purpose of avoiding penalties under the Internal Revenue Code, or for promoting, marketing or recommending any transaction or matter addressed herein.
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