With a House vote of 403 to 12 the home buyers federal tax credit was extended earlier this month. Not only was the bill extended, but it was also expanded making it available to current home owner’s looking to purchase a new home. Besides making the tax credit available to more home buyers, the bill includes help with unemployment benefits and a break on taxes for businesses losing money because of current economic conditions.
For individuals that are receiving unemployment in states where unemployment payments will be extended to an additional 6 weeks on top of the 14 weeks. Also businesses that have lost money during 2008 and 2009 to obtain refunds on taxes paid on profits for a period of the last 5 years.
The major part of the package was aimed at home buyers. Originally the federal tax credit for home buyers was only made available to first time home buyers and was set to expire November 30. The credit was extended until spring and was expanded to include current home owners too. The credit is available for 10% of the purchase price on a home up to $8,000 for first time home buyers and up to $6,500 for current home owners. For a current home owner to qualify for the credit they must have owned their current home for a period of at least 5 years. All purchase agreements must be signed by April 30th and all closing on the purchased property must be finalized by June 30th, 2010.
The deadline for members of the U.S. military that served outside of the U.S. for at least 90 days between January 1, 2009 and May 1, 2010 is extended for an additional year.
Qualifying annual income limits to receive full credits are up to $125,000 for individuals and $225,000 for joint filers. Reduced credits are available to individuals with annual incomes up to $145,000 and up to $245,000 for joint filers.
This package was implemented in an effort to stimulate the economy by encouraging prospective buyers to go through with purchasing new homes.
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