As part of the Defense Appropriations bill signed into law on December 19, Recovery Act funds will continue to subsidize 65 percent of COBRA health insurance premiums for certain unemployed individuals. The subsidy program, which originally covered the period between February 17 and November 30, 2009, now runs through February 2010 for people who lost their jobs through no fault of their own between September 1, 2008, and February 28, 2010.
The Department of Labor website has more details.
Also, with enactment on November 6 of the Worker, Homeownership and Business Assistance Act of 2009, three other key provisions of the Recovery Act were either extended or expanded.
Emergency Unemployment Compensation
This legislation added another 14 weeks of unemployment benefits. In states exceeding an 8.5 percent unemployment rate (currently 26 states), an additional six weeks of benefits are available, for a total of 20 weeks. In all cases, the $25 in Recovery funds added to each regular benefit payment also continues.
Contact your state unemployment office for details.
First Time Homebuyer Credit
The original provision – a tax deduction of up to $8,000 – applied only to people buying their first homes between April 8, 2008, and December 1, 2009. The cut-off date has now been extended to April 30, 2010. Also, a similar credit – up to $6,500 – is now available to current homeowners who buy new principal residences in the same time frame. However, those homeowners must have lived in their previous homes for a five-year consecutive period in the previous eight years before the date they buy the new home.
For either credit:
• New home can cost no more than $800,000
• Individual buyers must have income of $125,000 or less
• Joint tax-filers must have combined income of $225,000 or less
Visit the IRS website for more information.
Business Tax Credits
The new law also extends and expands tax benefits for businesses incurring net operating losses during the recession. Businesses of all sizes experiencing such losses in 2008 and/or 2009 are able to claim refunds on taxes paid up to five years earlier (expanded from two years). In the original legislation passed in February 2009, the five-year expansion applied only to 2008 and to businesses with annual gross revenues under $15 million.
In addition, the Senate voted in December to extend two key Recovery provisions that had expired. One involved a maximum federal guarantee of 90 percent of the amount of a Small Business Administration loan (vs. 75 percent, before the Recovery Act). The other was a waiver of fees the SBA normally charges to banks. Both provisions have been extended through February 2010.
Education Tax Credit
The Hope Credit has been expanded under the Recovery Act to help more parents and students qualify for this education tax credit, including those with higher incomes who were previously excluded. Temporarily renamed as the American Opportunity Tax Credit, it will now be available for tax years 2009 and 2010 to individuals with modified adjusted gross incomes of 80,000 or less, or $160,000 or less for married couples filing jointly. It also adds required course materials to the list of qualifying expenses and allows the credit – up to $2,500 per student per year – to be claimed for four years of post-secondary education instead of two.
More Benefits & Tax Credits
Read how Recovery Funds are Stabilizing Education Budgets
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