Washington, DC – November 6, 2009 – (RealEstateRama) — Congressman Joe Courtney announced that he has voted in favor of H.R. 3548, the Unemployment Compensation Extension Act, which extends an additional 14 weeks of unemployment assistance to all states, including Connecticut, and extends the homebuyer tax credit for first-time buyers and military families. The legislation also provides relief to businesses by extending a five year net operating loss carryback to 2009. The bill passed 403-12.
“Many of Connecticut’s families are still struggling to make ends meet as the economy slowly begins to recover, which is why extending unemployment benefits is the right thing to do,” stated Courtney. “As the economic engine once again begins to churn, I believe that extending the first-time homebuyer tax credit will prove to be one spark that helped to make recovery happen. The credit has been extremely successful in Connecticut and impacts multiple industries within the housing sector. Today, Congress has taken an important vote that moves our economy in the right direction.”
Congressman Courtney led an effort in the House to extend the FTHB Tax Credit. Click here to read a bipartisan letter that he wrote with Republican Congressman Ken Calvert.
Congressman Courtney also spoke on behalf of the legislation just prior to the vote. Click here to speak to view the Congressman’s statement on YouTube.
Unemployment Insurance Extension
Unemployment insurance will be extended by 14 additional weeks for all states. In addition, the legislation creates a new tier within the Emergency Unemployment Compensation program providing 6 additional weeks for states with an unemployment rate over 8.5 percent. Connecticut is not currently eligible for that increased rate, as the unemployment rates for the previous three months have been 7.8, 8.1, and 8.4 percent.
In addition, on October 21, 2009, Congressman Courtney joined with Rep. Ken Calvert (R-CA) to send a bipartisan letter being sent Wednesday to Speaker Nancy Pelosi and Minority Leader John Boehner urging an extension of the First Time Home Buyer Tax Credit. Including the authors, 165 bipartisan Members of Congress signed the Courtney-Calvert letter.
First-Time Homebuyer Tax Credit
As amended by the Senate, H.R. 3548 extends the Homebuyer Tax Credit for first-time buyers and creates a new “step-up” program for homeowners.
- The measure will extend the first-time homebuyer tax credit until April 30, 2010. In addition, those who have signed a contract before May 1, 2010 will have 60 days to close on the home.
- Increases the income limits to $125,000 on a single return and $225,000 on a joint return (from $75,000 and $150,000, respectively). As with the current credit, the extended credit has a $20,000 phase-out after those limits are reached.
- Those who purchase in 2010 will be able to claim credit on 2009 tax return.
- Definition of first-time buyer remains the same as those who have not owned a home in the last three years.
- The credit will remain at $8,000.
- Those who have owned the same home for 5 consecutive of the last 8 years will be eligible for a $6,500 tax credit.
- The $6,500 tax credit will be eligible for purchases between December 1, 2009 and May 1, 2010. The same opportunity to close within 60 days applies.
- The income limits are also $125,000 on a single return and $225,000 on a joint return and have a $20,000 phase-out thereafter.
- Those who purchase in 2010 will be able to claim the credit on 2009 tax return.
Other provisions regarding the homebuyer tax credit in the bill.
- No homes over $800,000 will be eligible for the tax credit.
- Included revised language from H.R.3590, the Service Members Home Ownership Tax Act which passed the House on October 8 and which JDC cosponsored. It will extend the tax credit for the military and other Foreign Service Officers serving abroad through April 30, 2011. It also waves the recapture fee for all military personnel should the individual move and sells the home within 3 years.
- Cuts down on tax credit fraud by providing authority to the IRS to do greater electronic oversight and requires that the taxpayer claiming the credit be 18 or older.
Extension of Carryback Net Operating Expenses Losses
The bill passed today also extends carryback for net operating losses for up to five years for losses incurred either in 2008 or 2009, but not both (at the election of the taxpayer). Businesses will be able to offset 50 percent of the available income from the fifth year and 100 percent of all income in the remaining four carryback years. Small businesses that have already elected to carryback 2008 under ARRA may also elect to carryback losses from 2009. This proposal is estimated to cost $10.4 billion over 10 years.