Senate Remain at Impasse on Home Buyer Tax Credit, Net Operating Loss Expansion

Senate may vote next week Senators have been trying to reach an agreement this week on an amendment to legislation that would extend unemployment insurance that would expand both the first-time home buyer tax credit and net operating loss (NOL ) carry-back from two to five years. Senator Max Baucus (D-Mont.) today outlined his amendment that would extend the existing $8,000 first-time home buyer tax credit, set to expire on November 30, 2009 through June 30, 2010 (contracts must be in place by April 30 to qualify).  In addition, the amendment would expand the income thresholds to those with incomes of $125,000 for individuals and $225,000 for couples, up from $75,000 and $150,000 under current law.  Further, the tax credit would be expanded at a reduced figure of $6,500 to home buyers who have lived in their homes for at least five years.  The amendment would also expand NOL carry-back relief from two to five years.  The NOL provision would allow unprofitable companies to obtain immediate cash refunds on taxes they paid in previous years.  Current law allows companies to get refunds of taxes paid in the previous two years, or five years for smaller companies in 2008.  Proponents of NOL relief-including AGC-are seeking to extend the two-year period to five years for all companies for both 2008 and 2009 losses. AGC has called for expansion of these two tax provisions in its Build Now for the Future: A Blueprint for Economic Growth.  AGC sent a letter last week in support of the home buyer and NOL expansions.