Congress passes Worker, Homeownership, and Business Assistance Act of 2009

This week the House of Representatives, by a vote of 403-12, approved H.R. 3548, the “Worker, Homeownership, and Business Assistance Act of 2009.” The Senate passed it on November 4 by a unanimous vote, so the bill is on its way to the President for his expected signature.

The new law includes a new net operating loss provision, plus other changes, such as an extension of the FUTA surtax, expansion of electronic filing by return preparers, modified failure to file penalties for pass-throughs, and modified estimated tax payments for large corporations.

ü  The Act provides an election for most taxpayers (not just small businesses) to increase carryback period.

ü  The Act suspends the 90% limitation on use of AMT NOL for tax years ending after 2002.

ü  FUTA tax “surtax” of .2% is extended until 6/30/11.

ü  Estimated tax payment requirements have been modified.

ü  Increased penalties for passthrough entities that are NOT filing returns ($195 per K-1).

“The new law also gives a new lease on life to the first-time homebuyer tax credit (FTHTC) and makes many modifications to the credit, including a change allowing the credit to be claimed by existing homeowners who are long time residents.”

ü  FTHTC extended to residences purchased before 5/1/10.

ü  FTHTC AGI phase-out limit increased to $145,000 Single $225,000 MFJ

ü  FTHTC is available for “long-time residents” who purchase a home after “enactment date”.  Credit amount is limited to $6,500 for these purchases.

ü  FTHTC cannot be claimed if residence purchase price exceeds $800,000.

ü  Due to abuse of this credit IRS now requires closing statements to be filed with returns that include the credit.

Download a more detailed RIA summary of the provisions here.