Highlights of the Worker, Homeownership, and Business Assistance Act of 2009 On November 6, 2009, President Obama signed H.R. 3548, the Worker, Homeownership, and Business Assistance Act of 2009 (WHBAA) into law after its approval by the House and Senate earlier in the week. In addition to extending unemployment compensation benefits, the new law expands and extends tax provisions affecting both individual and business taxpayers. The following highlights the tax implications of the act and explains how this new legislation may impact you or your business.   Tax Relief for Homebuyers   First-Time Homebuyer Credit - Extended & Expanded   This credit of up to $8,000 was set to expire as of December 1, 2009. The new law extends this credit through April 30, 2010. Additionally, if you enter into a binding contract before May 1, 2010, you will have until July 1, 2010 to close on the purchase of the qualifying personal residence. In order to qualify, either you or your spouse must not have held ownership interest in a principal residence during the three-year period prior to the acquisition. The new law increases availability of this credit to higher income taxpayers by raising the adjusted gross income (AGI) limitations. The credit is now phased out at AGI in excess of $145,000 ($245,000 for joint filers). The previous phase-out limits were $95,000 ($170,000 for joint filers).   Homebuyer Credit - New "Long-time Resident" Provision   Long-time residents may now qualify for a reduced credit of up to $6,500 for home purchases made after November 6, 2009 through April 30, 2010. To qualify as a long-time resident, you or your spouse must have maintained the same principal residence for any 5 year period during the 8 year period preceding the purchase of a subsequent principal residence.   New Anti-Abuse Provisions Relating to Homebuyer Credits   For purchases after November 6, 2009, no credit may be claimed if the purchase price of the property exceeds $800,000. The new law also imposes a minimum age requirement of 18 years and specifically excludes transactions involving related parties.   Tax Relief for Struggling Businesses   Extension of the 5 Year NOL Carryback   New law makes it easier for most businesses to get immediate tax savings from net operating losses (NOL) by allowing losses incurred in 2008 and 2009 to be carried back to earlier, more profitable tax years. Eligible small business taxpayers that made a 5 year carryback election under the pre-WHBAA rules may also make the 5 year election for 2009.   Expanded 5 Year NOL Carryback to Include ALL Business Taxpayers   The previous extended NOL carryback provision that was in place for 2008 under the American Recovery and Reinvestment Act only applied to certain eligible small businesses with gross receipts of less than $15M. The 5 year NOL carryback under WHBAA does NOT include a gross receipts limitation making the election available to all business taxpayers.   Changes to Certain NOL Limitations   The amount of the allowed carryback is limited to 50% of the taxable income for the 5th preceding tax year. The 90% limitation on NOLs for AMT purposes has been suspended for both 2008 ad 2009 loss years.   If you are considering buying a home, have already made a purchase, or if you own a business, please contact us to discuss how you or your business may be affected by these more generous, but complex changes. To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used for the purpose of avoiding penalties assessed under the Internal Revenue Code.