Government Rebates and Payments

Teacher Jobs Bill Approved Preventing State Layoffs and Increasing FMAP Medicaid Funding

A $26 billion state aid package was approved by Congress (and will be signed by the President) that saves thousands of state teaching and government worker jobs. The package provides $16.1 billion to extend (for six months) Medicaid funding for states, known as FMAP. The measure also provides $10 billion for a fund Democrats say will avert 138,000 state employee layoffs. It passed with the limited support of Republicans.

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New Bills for 2010 Home Buyer Credit and Unemployment Insurance Extension

The home buyer credit, extended and expanded over the last 3 years is set to expire at the end of this month with Congress still unable to approve the extension as part of HR 4213. However, recently released data for May 2010 shows worrying trends of sharply declining sales of existing and new homes. Further, inventory data and foreclosure activity have not shown any signs of improvement. All this suggests that the expiration of the home buyer credit may have more of an impact than people thought.

This has prompted Congress to take more action with the stalling of the HR 4123 bill in Congress, due to other provisions. As such 2 new bills have been introduced to try and extend the home buyer credit and also unemployment insurance – 2 key bills that Congress is likely to approve given their importance to their constituents. These bills are:

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Homebuyer Tax Credit Fraud Puts Pressure on Further Extensions

As many readers of this site await to hear about a possible extension to the home buyer credit closing date, part of the latest Jobs and Tax Bill (HR4213), it was worrying to read some of the recently released IRS statistics on fraud surrounding the credit.

The IRS  doled out more than $27 million in fraudulent claims for the home buyers’ tax credit on returns for 2008, including claims by prisoners serving life sentences and people who purchased their home before the credit was in effect, according to a U.S. Treasury Department report. One group in particular, 1200 prison inmates, including 241 serving life sentences, defrauded the government of $9.1 million in tax credits reserved for first-time home buyers.

Treasury’s inspector general also found that

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Tax Credits and Deductions for Teachers ($250), Unemployed, Home Owners ($500/$1000) and College Tuition in 2010 Jobs and Closing Tax Loopholes Act

The recently introduced American Jobs and Closing Tax Loopholes Act (Bill: HR 4213) includes important tax cuts to put more money back into the pockets of American families and workers. This new bill extends critical tax cuts through the end of 2010 so families and workers can receive the full benefits of these tax cuts on their 2010 tax returns and, therefore, have more money to spend on the items they need like gas and groceries. The proposals are estimated to provide American families with an additional $5 billion of tax cuts in 2010. Specific tax breaks and credits include:

Tax Cut for College Tuition – This bill extends a tax deduction for qualified education expenses including college tuition and fees, so Americans can get the world-class education they deserve without going bankrupt in the process.

Property Tax Deduction – This bill extends the additional standard deduction for state and local property taxes to save families money on their federal tax returns. This deduction allows taxpayers who do not itemize their tax deductions to receive property tax relief as a standard deduction of $500 for single filers and $1,000 for joint filers.

Tax Cut for School Teachers – This bill extends a $250 tax deduction for teachers who buy

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American Jobs and Closing Tax Loopholes Act of 2010 (HR 4213) Update – New Tax Breaks, Unemployment Insurance and Home Buyer Credit Extension

[Update July 2010] – This bill – HR4213 – was passed by Congress and is expected to signed into law by the President. The bill, also known as the American Jobs and Closing Loopholes Act of 2010 originally contained a provision to extend unemployment benefits, as well as a number of expiring tax provisions, which passed through the House on May 28, 2010.  The approved bill was revised to only contain an extension for unemployment benefits, in order to secure passage through Congress. Details of the unemployment benefits extension can be found here.

[Update] To appease Senate members concerned about the rising cost of this bill, Democrats have scaled back unemployment benefits and Medicare physician reimbursement measures. The revised jobs bill eliminates a $25 weekly supplement for the jobless that had been part of the last year’s stimulus act. Those currently receiving the supplement in their unemployment benefits check will continue to do so until they exhaust their extended benefits, or until the week of Dec. 7, whichever comes first. That cut will reduce the bill’s cost by $5.8 billion over the next decade.

The new version of the bill would also freeze a 21% cut to Medicare physician reimbursement rates only through November, instead of through 2011. This will reduce the bill’s size by $16.4 billion over 10 years. The legislation, which has been stuck in the Senate for more than a week, originally came in at about $140 billion and would have added about $78.7 billion to the deficit. The revised bill would raise the deficit by $55.1 billion.

Lawmakers are hoping to vote on the bill as early as Thursday. But if Democratic leaders can’t rustle up enough support, the vote could be pushed back to next week.

The grab-bag legislation still contain provisions to renew expired tax provisions, lengthens a small business lending program and adds to infrastructure investments. It also increases the tax on money paid to managers of hedge funds and investment partnerships to ordinary income levels instead of the much-lower capital gains rate.  Under the revised bill introduced Wednesday, investment fund managers would have to treat 75% of this money as ordinary income, beginning in 2011.

Senate lawmakers also voted Wednesday to include a measure in the bill that would push back the deadline to close on home purchases and still qualify for a federal home buyer tax credit of up to $8,000. Homebuyers would have until September 30, instead of June 30, to complete the transaction.

I will continue to monitor this  bill as it progresses through Congress for any further updates and encourage you to subscribe (free) via Email or RSS to get the latest news along with all the other stimulus payments in 2010 and 2011.  You can read the full bill and get more details here.

The Committee on Ways and Means, the chief tax-writing committee in the House of Representatives, has introduced a new bill called the H.R. 4213 American Jobs and Closing Tax Loopholes Act. The “American Jobs and Closing Tax Loopholes Act” makes significant investments in American jobs and cuts taxes to help the nation continue along the path of economic recovery and job growth. The economy has added 573,000 jobs since December-this bill includes the following key provisions to continue that growth:

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Saving Money With a Government Backed Mortgage Through VA, FHA or USDA Loans

The market for government loans is skyrocketing. More and more families are ready to settle down in their dream home, and government-backed mortgages seem like a way to make home ownership happen quickly and easily. Three loans programs in particular have become buyers’ favorites throughout the last few years: VA, FHA, and USDA loans. Whether you want to live in the big city or in the country, each loan has a variety of unique benefits and opportunities. So, let’s look at what these three major loan programs have to offer.

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