First Time Home Buyers Tax Credit Extended Until April 2010

On Friday, President Obama signed the Worker, Homeownership and Business Assistance Act of 2009, which extends the First Time Home Buyer Tax Credit, as well as offering more benefits to the unemployed and creating a tax credit for existing home owners that would like to purchase a new home.

The Worker, Homeownership and Business Assistance Act of 2009 passed the Senate two weeks ago and was sent to the House of Representatives, where it was quickly approved. This new law extends the $8,000 first time home buyers tax credit and the existing homeowners tax credit until April 2010. One of the key components of this tax credit is that it does not need to be paid back and is instead a one time payment from the Government.

Under the law, most of the old requirements remain the same, but there have been some changes:

• The Income Level has been raised, so now people who make up to $125,000, or $225,000 for married couples, can now take advantage of the tax credit.
• A Cap has also been added on the total price of the home, restricting the tax credits to purchase of homes priced $800,000 or less.
• Existing Homeowners can now take advantage of the credit as well, but will only be able to receive up to $6,500.

These new changes come into affect on November 06, 2009 and can be applied to homes purchased on or after this date. Worker, Homeownership and Business Assistance Act of 2009

Like the old tax credit, homeowners will still be able to file amended tax returns, so that they can receive the tax credit without having to wait until April.

Part of HR 3548 , the Worker, Homeownership and Business Assistance Act of 2009, also is intended to help reduce fraud, by making it easier for the IRS to detect fraudulent claims.

Changes to Unemployment

In addition to changing the tax credit for new homeowners, HR 3548 also extended Federal Unemployment Benefits for those whose benefits are about to expire.

The Worker, Homeownership and Business Assistance Act of 2009 extends everyones Federal Unemployment Benefits for 1 week and anyone living in a state with more than 6% unemployment will be eligible for an addition 13 week extension.

An additional extension was also added, which provides an additional 6 weeks for anyone living in a state with more than 8.5% unemployment. However, with the way the law is worded, those on unemployment must take the 13 week extension first, before they can apply for the 6 week extension. As a result, it will not be possible for anyone to take advantage of the 6 week extension, unless congress decides to renew the legislation. In this regards, this provision of the law was outdated even as it was signed by President Obama.

Other Changes

In addition to changing the tax credit for homeowners and unemployment benefits, the law also requires anyone who prepares or expects to prepare more than 10 tax returns a year to submit them electronically.