After months of lobbying by various associations, including the National Association of Home Builders, Congress voted to extend the homebuyer tax credit last week, and President Obama signed the bill into law on Friday, November 6.The legislation will extend the current $8,000 first-time homebuyer tax credit to purchases of primary residences under contract by April 30, 2010 and closed by June 30. It would also create a new $6,500 homebuyer tax credit for those that have owned their primary home for five years. Further, the legislation would raise qualifying income limits to $125,000 (single) and $225,000 (couple).

The Window and Door Manufacturers Association (WDMA) commended Congress on the passage of the legislation.

“The current homebuyer tax credit has been key to helping the struggling housing market this year,” says WDMA executive vice president Michael O’Brien. “The expanded tax credit will help reduce the inventory of foreclosures, stabilize prices and restore consumer confidence in the housing market, which will help lift all businesses in the building supply chain.”

Additionally, the legislation will expand net operating losses (NOL) relief to all businesses so that they can offset current losses against taxable profits earned in the previous five years. Previously, it had been limited to companies with revenues under $15 million, according to O’Brien.

“The NOL carryback expansion will help many companies in the window, door and skylight industry that have struggled during this recession,” he says. “This will free up capital and help save industry jobs across the country.”

The NAHB estimates that the extended and expanded home buyer tax credit will create 211,000 jobs and generate 180,000 additional home sales in the coming year. It is also expected to generate $9.6 billion in wage income and $6.9 billion in federal, state and local taxes, according to an NAHB press release.

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