AHLSTARZ Tax and Accounting Service -- Numbers, Simplified.

The Senate on November 4 approved, by an 98-to-0 margin, the Worker, Homeownership, and Business Assistance Bill of 2009 (HR 3548), which includes several tax-related provisions in addition to extending unemployment benefits. The House could approve the measure as early as November 5.

The substitute legislation offered by Senate Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., would provide 14 additional weeks of benefits to all unemployed people who exhaust their benefits. It would also give six additional weeks of benefits to unemployed people who exhaust their benefits in states with 8.5-percent unemployment or more. The total cost of the package is $2.4 billion and would be paid for with an extension of the federal unemployment tax (FUTA) until June 30, 2011.

The measure also extends the $8,000 tax credit for first-time homebuyers through April 2010 and allows a reduced credit of $6,500 for homeowners who have lived in their current residence for five years or more. The bill proposes an expansion of net operating loss (NOL) rules, allowing all businesses to carry back NOLs for up to five years for losses incurred either in 2008 or 2009, but not both.

The legislation is completely paid for by delaying the effective date for foreign companies' interest income allocation rules from 2011 to 2018. It also contains a provision that increases penalties for taxpayers that fail to timely file partnership and S corporation returns.

By Jeff Carlson, CCH News Staff