Congressman Teague Votes to Extend Homebuyers Tax Credit, Business Tax Relief and Unemployment Benefits

Washington, DC – November 6, 2009 – (RealEstateRama) – Today, Congressman Harry Teague voted to extend critical benefits and tax relief programs to stimulate southern New Mexico’s economy. The Worker, Homeownership and Business Assistance Act of 2009 will offer stability to families and businesses across America by extending immediate unemployment benefits, the homebuyers’ tax credit, and tax relief for military families and businesses. The legislation will offer financial support to both individuals and industries, encouraging increased activity in the housing and small business markets. 

The bill passed today extends unemployment benefits in New Mexico for an additional 14 weeks. This provision is fully paid for by an extension of the Federal Unemployment Tax Act (FUTA) through June 30, 2011. The first House version of the legislation did not include provisions that would benefit New Mexico, prompting Congressman Teague to originally vote against the bill. In New Mexico there are an estimated 1,577 workers exhausting unemployment insurance benefits that are now eligible for the extension.

“Many industries and families in my district are still struggling through this economic downturn to make ends meet. The provisions in this bill will offer an immediate safety net to southern New Mexicans who have lost their jobs and fear losing the benefits they rely on to keep a roof over their heads and food on their tables,” said Congressman Harry Teague. “This legislation takes important, immediate steps to help stabilize our small businesses and strengthen our housing market while growing our economy for the future.”

The bill also includes an extension of the $8,000 first-time homebuyer tax credit through April 30, 2010 and provides a $6,500 credit to new purchasers who have lived in their current residence for five years or more. Military families struggling to make mortgage payments will also receive relief by making those payments tax-exempt. In New Mexico 7,262 buyers have claimed the homebuyers tax credit in 2008 and 2009. There has been a 12.1% increase in home sales in New Mexico in 2009.

Additionally, the bill aims to boost businesses, allowing U.S. companies to carry back losses incurred in either 2008 or 2009 against income earned in any of the five prior years.

Additional Information on the Worker, Homeownership, and Business Assistance Act of 2009:

Emergency Unemployment Benefits Extension

· The legislation extends unemployment insurance by up to 14 additional weeks for jobless workers in every state, and a total of up to 20 weeks for workers in states with unemployment levels over 8.5 percent.

Help for Homebuyers, Including Military Families

· Extends the $8,000 homebuyer tax credit to first-time homebuyers with a binding contract before

· As soon as the President signs this bill into law, it will expand the homebuyer tax credit to more families — phasing out for individuals with income above $125,000 and for joint filers with income about $225,000 (the current law credit phases out for individuals with income starting at $75,000 and for joint filers with income starting at $150,000) and make a $6,500 credit available to homebuyers who have been in their current residence for five or more consecutive years out of the last eight years

· The credit is available for the purchase of principal residences with a purchase price of up to $800,000.

· To help service members take full advantage of homebuyer incentives in the Recovery Act, the bill:

  • Ensures that certain payments under the Defense Housing Assistance Program (HAP) to assist military personnel selling a home that has declined in value are exempt from tax;
  • Ensures service members will not have to repay the first-time home buyer credit if they are ordered to deploy to a different location and, as a result, forced to sell their home within three years; and
  • Extends for one year, to April 31, 2011, the deadline for taking advantage the first-time homebuyer credit for qualifying service members, so that certain service members stationed overseas can take advantage of the credit when they return.

· To combat abuse, the bill improves administration of the homebuyers’ tax credit by:

  • Requiring taxpayers to include documentation to prove that they purchased a home
  • Requiring a minimum age of 18 to claim the credit
  • Authorizing IRS to look at prior year returns and determine if a taxpayer is eligible for the credit
  • Improving tax administration by increasing the number of electronic returns filed by return preparers

Tax Relief for Struggling Businesses/ 5-Year NOL Carryback

· Allows businesses to use net operating losses (NOLs) from 2008 or 2009 to offset profits from five previous years, up from two years. In many cases, that would result in refunds to struggling businesses. Businesses would only be able to offset 50 percent of their income from the fifth year.

· Small businesses who have already elected to carry back 2008 under the American Recovery and Reinvestment Act may also elect to carry back losses from 2009.

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