Unemployed workers facing the loss of their benefits have a little less to worry about. On Thursday, a bill passed by lawmakers in the House of Representatives allowed for an extension of those benefits. The legislation also expands an $8,000 first-time home buyer tax credit and gives business owners affected by the economic downturn a tax credit.
The measure passed the House by an overwhelming margin -- 403-12 -- and now goes to President Barack Obama to sign, which he has said he would do as early as Friday. The Senate passed the bill 98-0 on Wednesday. It extends a lifeline to jobless Americans who would otherwise see unemployment benefits disappear starting next month.
The nation's unemployment rate rose to 9.8 percent last month and the number is expected to edge higher when the Labor Department reports fresh data from October on Friday. Nationwide, the bill provides a 14-week extension, but allows for as many as 20 additional weeks of unemployment benefits for residents in 26 states hardest hit by the recession, where jobless rates top 8.5 percent. Under the new legislation, workers could qualify for up to 99 weeks of assistance.
The home-buyer tax credit will be expanded to include those with higher incomes than under than plan's current iteration, which allows individuals to earn up to $75,000 to claim up to a $4,000 credit, and couples to earn up to $125,000 to get up to an $8,000 credit. The new legislation allows for singles who make up to $125,000 and couples to earn up to $225,000.
The bill also allows current homeowners who have been in their homes for five years to claim a credit of up to $6,500 if they purchase a new home as their primary residence. Homes priced higher than $800,000 are ineligible.
The beefed-up home-buyer tax credit was praised by the National Association of Realtors, an industry trade group. In a podcast, President Charles McMillan called the legislation a "major victory for consumers, realtors and the housing market." The group, which holds its annual convention next week in San Diego, lobbied hard for the program's extension, which has been credited for boosting homes sales during the summer and reducing the inventory of unsold homes.
In recent weeks, wannabe home buyers have hurried into the market hoping to secure a deal before the current programs Nov. 30 expiration date. The new bill extends the deadline to April 30.
Another provision of the bill will allow businesses to apply losses incurred last year or expect to incur this year to previous years' income, allowing them to qualify for tax credits up to $33 billion. Language in the $787 billion economic stimulus package that President Obama signed into law in February created the tax credit, but restricted it to small businesses.
In addition, the bill allows smaller investors who lost money in the Bernard Madoff scandal to claim losses against taxes paid on previous years' income.