Colorado Economic Recovery and Accountability

New Laws Passed by Congress Extend COBRA and other benefits

On December 19, 2009, President Obama signed the Defense Appropriations bill into law. The law includes provisions that will extend the  Recovery Act program that pays for 65 percent of COBRA health insurance premiums for certain unemployed individuals. The subsidy program, which originally covered the period between February 17 and November 30, 2009, now runs through February 2010 for people who lost their jobs through no fault of their own between September 1, 2008, and February 28, 2010, according to the national Recovery Act website.  More information about this benefit can be found at the Department of Labor website: http://www.dol.gov/ebsa/cobra.html.
 
Also, the Worker, Homeownership and Business Assistance Act of 2009, enacted in November 2009, extends or expands three other provisions of the Recovery Act:
 

  • First Time Homebuyer Credit


The original provision – a tax deduction of up to $8,000 – applied only to people buying their first homes between April 8, 2008, and December 1, 2009. The cut-off date has now been extended to April 30, 2010. Also, a similar credit – up to $6,500 – is now available to current homeowners who buy new principal homes during the same time frame. However, those homeowners must have lived in their previous homes for a five-year consecutive period in the previous eight years before the date they buy the new home.
 
For either credit:

  • New home can cost no more than $800,000
  • Individual buyers must have income of $125,000 or less
  • Joint tax-filers must have combined income of $225,000 or less


 
The IRS has more information at http://www.irs.gov/newsroom/article/0,,id=204671,00.html

  • Business Tax Credits


The new law also extends and expands tax benefits for businesses incurring net operating losses during the recession. Businesses of all sizes experiencing such losses in 2008 and/or 2009 can claim refunds on taxes paid up to five years earlier (expanded from two years). In the original legislation passed in February 2009, the five-year expansion applied only to 2008 and to businesses with annual gross revenues under $15 million.
 
In addition, the Senate voted in December to extend two key Recovery provisions that had expired. One involved a maximum federal guarantee of 90 percent of the amount of a Small Business Administration loan (vs. 75 percent, before the Recovery Act). The other was a waiver of fees the SBA normally charges to banks. Both provisions have been extended through February 2010.
 

  • Emergency Unemployment Compensation

 
This legislation added another 14 weeks of unemployment benefits. In states exceeding an 8.5 percent unemployment rate (currently 26 states), an additional six weeks of benefits are available, for a total of 20 weeks. In all cases, the $25 in Recovery funds added to each regular benefit payment also continues. Colorado currently does not qualify because of its lower unemployment rate.