The U.S. Senate appears on the verge of extending and expanding the first-time homebuyer tax credit into 2010.
According to the Senate Committee on Banking, Housing & Urban Affairs Web site, an agreement has been reached on a measure that includes these provisions:
• Extends the $8,000 first time Homebuyers Tax Credit and creates a new $6,500 tax credit for homeowners buying a new home from December 1, 2009 to April 30, 2010.
• Homebuyers with contracts as of April 30 qualify for the credit so long as they complete the transaction within 60 days.
• Available to homebuyers with incomes of up to $125,000 for a single return or $225,000 for a joint return.
• Not available for homes costing over $800,000.
• Homebuyers who already own a home are only eligible if the home they are leaving has been used as a principal residence for 5 years or more.
• Provides authority to the IRS to do greater oversight while processing the return and requires that the taxpayer claiming the credit be 18 or older.
• Members of the military, military intelligence and foreign service who are on qualified extended official duty are not subject to the recapture fee and individuals who have been deployed overseas for 90 days or more in 2008 or 2009 can claim the credit through April 30, 2011.
Backers hope to add the tax credit plan, known informally as the "Dodd-Lieberman-Isakson Amendment," to a larger package on federal unemployment insurance. A Senate vote could come as early as next week.
Here is how reporter Dina ElBoghdady described that process in an Oct. 29 Washington Post article headlined "Extension of Home Buyers' Credit Has Wide Senate Support:"
"Senate Majority Leader Harry M. Reid (D-Nev.) and other supporters of the tax credit hope to attach their proposal to an unemployment benefits bill that may reach the Senate floor this week if lingering issues are resolved about whether to also include two unrelated Republican amendments. 'We do expect this tax credit plan to be considered as a part of the unemployment bill at some point,' said Regan Lachapelle, a spokeswoman for Reid.
"The proposal is the latest of several regarding the tax credit that have been floated in recent days. Reid and others have been trying to cobble together a plan that would appeal to fiscal conservatives who have balked at the cost of the tax refund program and want it to lapse by the end of next month, as scheduled.
"On Wednesday, Senate Minority Leader Mitch McConnell (R-Ky.) said there is wide backing for the latest plan among Republicans, saying that 'most members' support it and the underlying unemployment measure. But Don Stewart, his spokesman, warned that nothing is a done deal. 'Everything is fluid' until there is unanimous agreement on what will reach the Senate floor, Stewart said."
Meanwhile, the National Association of Realtors continues to encourage its members to support the tax credit plan. For updates and details, visit the Realtor Action Center.
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