Here is an expanded outline on how the Worker, Homeownership, and Business Assistance Act of 2009 may affect some businesses (this outline does not include all the provisions of the act). Click here to read the bill as passed by both the House and the Senate.
- Allow for a 5 year carryback of 2009 NOLs
- i. Small business will be exempt from the 1 election rule. Thus small business claiming the 5 year carryback for 2008 losses can still elect 5 year carryback for 2009 losses
a. Removes the small business requirement
b. Offset 50% of taxable income in 5th prior year
c. Offset 100% of taxable income in 4th thru 1st prior years
d. Only 1 election allowed (either for fiscal years beginning in 2008 or fiscal years beginning in 2009)
- Homebuyer credit
- i. If using binding contract rule – must close by July 1, 2010
a. Extended for purchases (binding contracts entered into by) through 4/30/2010b. Recapture waived for 2009 purchases
c. Credit = lesser of 10% of purchase price or $8,000.
d. Credit phases out for modified agi between $125k and $145k ($225k and $245k for married joint returns.)
e. Can elect to treat 2009 purchases as if made in 2008 and claim credit on 2008 return
f. Need not be a new buyer
- i. Existing homeowners living in current residence for at least 5 consecutive years during 8 year period ending on date of purchase are eligible for credit
ii. Must live in new home for at least 3 years
iii. Credit reduced to $6,500
- i. Purchase price must be < $800,000 ii. Skip buying a house for the kids – no credit allowed if can be claimed as a dependent of another taxpayer iii. No credit for taxpayers under 18 1. Emancipated minors out of luck unless one is at least 18
h. MUST attach copy of settlement statement to the return
- Penalty for failure to file partnership or s corp returns increased to $195 per partner/shareholder per month beginning with 2010 returns.
- Electronic filing mandate
- a. Must use efile if preparing at least 10 individual income tax returns
b. Individual income tax returns means returns for individuals, estates & trusts
- Large Corporation estimated tax payments increased to 100.58% for payments due in July, August or Sept.
- a. Large corporation is a corporation with at least $1b in assets at the end of the preceding tax year.