Senate Extends Unemployment, Tax Credit For Home Buyers
U.S. Senator Kirsten Gillibrand announced the U.S. Senate passed new legislation that will provide economic assistance to millions of New York families and businesses by extending unemployment benefits for an additional 20 weeks, extending the first-time homebuyer tax credit for another five months, and providing targeted tax relief for businesses of all sizes to free up capital, save and create new jobs.
Senator Gillibrand, who strongly pushed for these measures and cosponsored the legislation, emphasized that cutting taxes for homebuyers and providing assistance to unemployed job seek ers will stimulate economic growth and help businesses retain jobs.
"Our economic recovery is not complete until every hardworking New Yorker has access to a good-paying job," Senator Gillibrand said. "The legislation we passed today is another step in the right direction.
It will help millions of New Yorkers who were hit hardest by the economic downturn as they continue to search for work.
With this measure, we will also continue to restore confidence in our housing market by bringing more new buyers into the market. Tax credits for homebuyers and benefits for job seekers will help stimulate further economic growth, but we must continue to stay focused on our recovery.
We must ensure small businesses have access to the capital they need to grow and create jobs to fuel our recovery for the long term."
The job market is historically the last part of an economic recession to recover - forcing the unemployed to bear the brunt of recessions the longest and making it increasingly difficult to find new work.
In addition to providing a lifeline for the unemployed, jobless benefits are effective economic stimulus because it puts money in the hands of those who need it most and who spend it immediately - injecting activity back into the sluggish economy. In fact, Moody's estimates that every dollar of unemployment benefits translates to $1.64 in economic stimulus.
Similarly, economists point to the first-time homebuyer tax credit as being incredibly important to our recovery by stabilizing our housing market and spurring new buyers. I
n fact, since the start of this year, the tax credit has led to over 150,000 new and existing home sales, according to estimates from the National Association of Home Builders (NAHB). Moody's Chief Economist Mark Zandi expects the credit to draw nearly 400,000 buyers into the market by the end of the year.
The legislation passed today will extend the tax credit another five months to give the housing market more time to stabilize, and bring more new families and first-time buyers into the market.
To crack down on fraudulent uses of the first-time homebuyer tax credit, Senator Gillibrand worked to insert language into the current bill that would require more oversight from the IRS. Specifically, this language would prevent fraud by requiring anyone seeking to claim the credit to be at least 18 years of age and to submit their settlement statement with their tax returns.
Additionally, it would enhance the IRS's authority to investigate potential cases of fraud and require the IRS to report to Congress on any prosecutorial and investigatory actions related to the tax credit within 90 days after enactment and quarterly thereafter.
The bill also provides tax cuts for large and small businesses that have been hit hardest by the recession by allowing them to deduct losses from taxes paid in previous years. This will allow more businesses to prevent job cuts and free up capital for new investments as we continue to recover from the economic downturn.
Senator Gillibrand is advocating for additional efforts to rebuild the economy and create good-paying jobs. Because small businesses account for nearly two-thirds of all private sector job creation, Senator Gillibrand is pushing new efforts that would use approximately $40 billion in unused TARP funds for loans to small businesses to give them the support they need to grow, create jobs and continue fueling our recovery.
As another step to continue creating new jobs, Senator Gillibrand is also advocating for new proposals that would provide additional tax credits for businesses as an incentive to create jobs, build their workforce and put more New Yorkers back to work.