The House has unanimously approved legislation to give the military and other overseas service members equal access to the first-time homebuyer tax credit.
H.R. 3590, the Service Members Home Ownership Tax Act of 2009, passed by a margin of 416-0 on Thursday. The legislation was introduced by Charles Rangel, D-N.Y. Rangel survived a vote on Wednesday to be ousted from his chairmanship of the House Ways and Means Committee as a yearlong House ethics committee investigation again expanded (see Rangel Keeps Job Running Tax Committee).
The new legislation would make certain changes to the Tax Code to improve how certain provisions included in the Recovery Act apply to service members, including members of the uniformed services, members of the Foreign Service, and intelligence employees.
This bill makes sure that the brave men and women who put their lives on the line every day get to enjoy the same benefits as every other American who benefits from their service, said Rangel in a statement. By extending the first-time homebuyer tax credit for service members overseas, we give these families more time to utilize the benefit, while also helping our economy continue its recovery.
The legislation would ensure that certain payments under the Department of Defense Housing Assistance Program are exempt from tax. The bill would also extend for one year the deadline for utilizing the first-time homebuyer credit for qualifying service members.
The provision helps ensure that service members who are stationed overseas can take full advantage of the credit when they return. Finally, the bill would also ensure that service members will not have to repay the first-time homebuyer credit if they are called up for service and forced to sell their home within three years of purchasing.
The first-time homebuyer tax credit is currently scheduled to expire on Nov. 30, 2009. However, members of Congress have been in talks with the Obama administration about extending the tax credit beyond the cutoff date and perhaps expanding it to more types of homebuyers besides first-timers. The credit provides up to $8,000 toward the purchase of a first home, but phases out for taxpayers with an adjusted gross income of $75,000, or $150,000 for a joint return.
The new legislation is not expected to add to the deficit. It is offset by an increase in the penalties for failure to file a partnership return or an S corporation return. For taxable years beginning after 2010, the penalty will be increased by $21, from $89 to $110, a provision estimated to raise $327 million over 10 years.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access