Key provisions in the bill:
Worker, Homeownership, and Business Assistance
1) The credit is renewed to home purchases under contract as of April 30th, as long as the purchase closes within 60 days. (That means you don’t have to rush to close escrow by the end of this month. Whew!)
2) Other homeowners qualify for a $6,500 credit if they have lived in their residence for five years. (That means they have lived in their last owned residence for 5 years out of the last 8 years. In other words, no house flippers.) This credit applies to homes purchased after November 30, 2009.
3) A variety of special rules for military. The key benefit is that they have until April 30, 2011 to finish their purchase, if they are deployed overseas for at least 90 days after December 31, 2008, and ending before May 1, 2010.
(Note: there are protections, too, like a waiver of recapture of the credit if they are on extended overseas duty and have to sell their home.)
4) There is an increase in the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, from the current $75,000 and $150,000.
5) The maximum home purchase price is $800,000.
Five-Year Carryback of Net Operating Losses (NOLs)
This has been expanded to large businesses as well. It applies to losses in 2008 and 2009. You are able to carry losses back as far as 5 years, or as little as two years. Limitations on the AMT NOL carryback have been removed.
Modification of Penalty for Failure to File Partnership or S Corporation Returns
The present penalty for late filing partnership returns and S corporation returns is $89 per partner or shareholder – per month for up to 12 months.
The new law increases the penalty to $195 per partner or shareholder. This is effective for tax years starting after December 31, 2009.
Expansion of Electronic Filing by Return Preparers
Sorry, I don’t understand this one at all. It sounds like double-talk to me, so I’ll post the Joint Tax Committee Summary in its entirety. You figure it out:
- The provision generally maintains the current rule that regulations may not require any person to file electronically unless the person files at least 250 tax returns during the calendar year. However, the proposal provides an exception to this rule and mandates that the Secretary require electronic filing by specified tax return preparers. “Specified tax return preparers” are all return preparers except those who neither prepare nor reasonably expect to prepare ten or
more individual income tax returns in a calendar year. The term “individual income tax return” is defined to include returns for estates and trusts as well as individuals.
The provision is effective for tax returns filed after December 31, 2010.
Time for Payment of Corporate Estimated Taxes
We need to accelerate our estimated tax payments due in July, August, or September, 2014, by 33 percentage points.
This is effectively immediately. huh???
Note: There are some additional provisions related to worldwide interest and military housing. You can read the entire summary using the link below.