House, Senate Pass Expansion of Home Buyer Tax Credit, Net Operating Loss Carryback

Both provisions included in AGC's Recovery Plan  Congress this week passed legislation to extend federal unemployment benefits (H.R. 3548) that included an expansion of the first-time home buyer tax credit and five-year carryback of net operating losses (NOL).  The current $8,000 first-time-home-buyer credit is set to expire on November 30, 2009.  Congress voted to extend the credit for an additional 5 months and increase the income limits to qualify, as well as to offer a new $6,500 tax credit for existing home buyers. The Recovery Act allowed businesses with gross receipts of $15 million or less that experienced net operating losses in 2008 to carry those losses back over the preceding five years.  The provision allows small businesses with deductions exceeding their income to get a refund for taxes paid in previous years.  The bill that the president is expected to sign shortly would expand the provision to allow all businesses to carryback net operating losses incurred in 2008 or 2009 over the preceding five years.   AGC called for enactment of both of these tax provisions in its Build Now for the Future: A Blueprint for Economic Growth.