On Friday, November 6, 2009, President Obama signed the “Worker, Homeownership, and Business Assistance Act of 2009″ which gives tax breaks to large corporations and extends the homebuyer’s credit.

The American Recovery and Reinvestment Act of 2009 extended the first-time homebuyer credit for purchases before December 1, 2009 and increased the credit to $8,000. The new law extends the date to close on a credit eligible purchase to before May 1, 2010. And for purchases subject to a written binding contract by April 30, 2010, the closing would have to be before July 1, 2010.

The credit is no longer restricted to first-time homebuyers. Taxpayers are able to claim the credit on the purchase of a new home if they have owned and used a prior residence as their principal residences for any 5 consecutive-year period during the 8-year period ending on the date of the purchase of the new principal residence. However, the homebuyer credit for these “long-time residents” cannot exceed $6,500.

The credit is phased-out based upon modified Adjusted Gross Income (AGI). The credit begins to be phase-out for joint filers with modified AGI above $225,000 ($125,000 for other filers). Prior to the new law the phase-out began at $150,000 and $75,000 respectively.

The credit is only available for homes with a purchase price of $800,000 or less. Previously there was no price ceiling.

A taxpayer is allowed to elect to treat the purchase as occurring on December 31 of the calendar year preceding the year of purchase in order to accelerate the refund.

The new rules take effect on November 6, 2009.

Net Operating Loss carryback period extended to five years.

The new law permits any business to elect up to a 5-year carryback for net operating losses (NOLs) incurred in either 2008 or 2009, but not both. Businesses are able to offset 50% of the available income from the fifth year and 100% of all income in the remaining four carryback years. Eligible small businesses already had the ability to elect to carryback their 2008 NOLs either 3, 4, or 5 years under the American Recovery and Reinvestment Act. These small businesses are able to elect to carryback losses from 2009 up to 5 years. Additionally, the 90% limitation on the use of any alternative tax NOL deduction is suspended for these NOL carryback deductions. The NOL provision is not available to a taxpayer if the federal government acquired an equity interest (or right to acquire such an interest) in the taxpayer under the Emergency Economic Stabilization Act of 2008.

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According to Hewitt Associates, COBRA enrollment has doubled since the enactment of The American Recovery and Reinvestment Act of 2009 (ARRA) earlier this year.

One of the provision of the ARRA provides COBRA premium assistance for employees who are involuntarily terminated from Sept. 1, 2008, to Dec. 31, 2009. Qualified participants pay 35 percent of the COBRA premium, with the remaining 65 percent subsidized by the employer and reimbursed by the federal credit to the employer’s payroll taxes.

“From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38 percent, up from 19 percent for the period of September 2008 through February 2009,” Hewitt said. Industrial manufacturers experienced an 800 percent increase in COBRA enrollments following enactment of the subsidy, while construction, leisure, and retail businesses experienced a 300 percent increase in enrollments, Hewitt found.

Find out more about the analysis here.

From IRS
New 2009 withholding tables issued to implement the Making Work Pay tax credit may leave some employees in an underwithheld position by year’s end. Learn how you can help employees prevent this via the IRS’s Withholding Calculator, which has been updated to reflect the impact of the MWP tax credit, and then file a new Form W-4. In particular, the following people may be affected:

• married couples with both spouses earning wages
• individuals working multiple jobs at one time
• anyone who may be claimed as a dependent on another person’s return
• people receiving income from a pension
• individuals receiving economic recovery payments

DALLAS, TX. (March 26, 2009) – Staff One, Inc., a leading provider of HR Outsourcing solutions, today announced a new program that will help small and medium-sized companies optimize their Human Resources costs, stay current with new employment laws and gain access to benefits typically enjoyed by much larger companies.

The Staff One HR Outsourcing Business Stimulus Program is designed for businesses with fewer than 750 employees. Participants in the program will receive a wide array of HR services that are typically only available to FORTUNE 500 companies.

For additional details on the program, companies can visit www.staffone.com/stimulus. To qualify for the program, companies must contact Staff One prior to April 15, 2009 and become a client by June 1, 2009. Existing clients are not eligible for the program.

To read the full press release, click here.

By NAPEO Staff
A little-discussed provision of the American Recovery and Reinvestment Act (ARRA) substantially expands whistleblower protections with regard to any activity by entities involved in the stimulus funds. Known as the McCaskill Amendment, Section 1553 extends to those contracting with entities receiving stimulus funds, even when only a portion of the activities are covered by the funds. The protection covers any disclosure by a person to a newly created oversight board, an inspector general, a government agency, a court, or a grand jury if the employee reasonably believes there is gross mismanagement of any agency contract or grant involving the funds, a gross waste of the funds, a substantial danger to public health or safety, an abuse of authority, or a violation of law, rule, or regulation. Protected disclosures will include those made in the ordinary course of an employee’s duties. The law prohibits waivers or releases of the rights and remedies in any agreement (including any pre-dispute arbitration agreement). Covered employers will be required to post notice of these rights.

On February 17, 2009, President Obama signed into law H.R. 1, the American Recovery and Reinvestment Act of 2009 (ARRA). Among many other provisions designed to encourage economic recovery, Title III of ARRA expands the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) Continuation Coverage to provide a federal subsidy toward an eligible worker’s COBRA premium.

• The provisions in ARRA providing this subsidy are effective as of the date of the President’s signing.
• Eligible workers may receive a 65% subsidy toward their COBRA continuation premium for up to 9 months. Previously any individual enrolling in COBRA was responsible for 100% of the cost of the coverage, plus a 2% administrative fee.
• The Treasury Dept. will administer the subsidy, providing employers or health plans, if they administer COBRA benefits, with a credit against payroll taxes for the cost of the subsidy.
• The subsidy terminates the date the individual becomes eligible for any new employer-sponsored health plan or Medicare coverage.
• Individuals involuntarily terminated from employment between September 1, 2008 and December 1, 2009 and who have annual incomes less than $125k (single) or $250k (joint filers) for the taxable year in which the subsidy is received are eligible for the COBRA assistance, along with their families.
• Qualified individuals who initially decline COBRA coverage prior to ARRA will be given an additional 60 days after they receive notice of the special election period to elect to receive the subsidy.
• The special election opportunity is also available to a qualified beneficiary who elected COBRA coverage but who is no longer enrolled on the date of enactment of ARRA, for example, because the beneficiary was unable to continue paying the premium.
• COBRA notices must include information on the availability of the premium assistance and must be provided to all individuals who terminated employment during the applicable time period, not just individuals who were involuntarily terminated.

The Department of Labor has 30 days after the enactment of ARRA to issue model notices for use by employers.

A number of programs were included in the Act, which focus on providing tax relief to both individuals and businesses. Some of the more notable provisions are:

“Making Work Pay” Tax Credit
The Making Work Pay credit, which is available in 2009 and 2010, is worth up to $400 for an individual and $800 for spouses filing jointly. This credit begins to phase out for taxpayers with adjusted gross incomes in excess of $75,000 for individuals and $150,000 for married couples filing jointly. This credit can either be claimed on tax returns or by reducing the amount of taxes that are withheld from paychecks.

“American Opportunity” Education Credit
This credit renames and expands the HOPE education credit. It allows a taxpayer to receive a credit of 100% for the first $2,000 in qualifying tuition and related expenses, and 25% for the second $2,000 of such expenses, for a maximum of $2,500. This credit is subject to a phase-out for individual taxpayers with an adjusted gross income in excess of $80,000 or $160,000 for married couples filing jointly.

Alternative Minimum Tax Patch
The Alternative Minimum Tax exemption is increased to $46,700 for individuals and $70,950 for married couples filing jointly, and allows personal credits against the Alternative Minimum Tax. This patch protects an estimated 26 million taxpayers from becoming subject to the AMT.

Above the Line Deduction for Automobiles
This is a new tax deduction for state and local sales tax paid on the purchase of new cars, from the effective date of the Act, February 17, 2009, through December 31, 2009. This deduction begins to phase out for taxpayers earning $125,000 per year for individuals and $250,000 for joint returns.

Extension of Bonus Depreciation
The bonus depreciation rules, which were set to expire after 2008, are extended for one year. The extended rule allows a 50% bonus depreciation for certain property placed in service by businesses in 2009, allowing businesses to deduct from their taxes 50% of the value of that property in addition to amounts that may otherwise be claimed under depreciation rules, after the item’s value is adjusted to account for the bonus depreciation.

Small Business Capital Gains
The law allows for a 75% exclusion for individuals on the gain from the sale of qualified stock held for more than five years. This applies to stock issued between February 17, 2009 and January 1, 2011. This exclusion is limited to individual investments and not the investments of a corporation.

Five-Year Carryback of Net Operating Losses
Businesses are allowed to “carryback” certain operating losses for up to five years, as opposed to the two year limitation previously allowed. Once a business opts to use the extended period, it becomes irrevocable.

Advanced Energy Investment Credit
A 30% investment tax credit is established for manufacturing advanced energy property, such as facilities that manufacture components for the production of renewable energy, energy conservation and other green technologies.

Non-Business & Residential Energy Property Credit
The tax credit for non-business energy property is increased to 30%. This credit may be claimed against expenses for certain energy-efficient improvements to existing homes, such as new furnaces, energy-efficient windows and doors, or insulation. To qualify, such expenses must occur in 2009.

New Markets Tax Credit
The dollars available for the New Markets Tax Credit increase to $5 billion for 2008 and 2009.

In addition to using tax policy as a method of stimulating the economy, the Act allocates substantial funding for a number of public infrastructure projects. The following is a sample of such projects.

Highway Funding
Highway and bridge construction projects will receive $27.5 billion. After amounts are pulled for particular expenditures such as park roads, technology training and bonding assistance, the remaining funds will be allocated to states and territories using an existing formula from the 2008 appropriations law for the Department of Transportation. Priority will be given to projects that can award funds on or around June 15, 2009 with project completion expected by June 15, 2011.

The State Fiscal Stabilization Fund
The Act provides $53.6 billion for a State Fiscal Stabilization Fund, of which $39.5 billion shall be used to enhance school budgets. States are given the discretion to use a portion of this fund for school modernization projects for K – 16 facilities.

Transit and Rail
New construction, repair and modernization of transit and rail systems will be given $17.7 billion. Of this amount, $8.4 billion is available for mass transit projects, $1.3 billion is available for Amtrak capital projects and $8 billion is available for Intercity Passenger Rail Service.

Clean Water
The Act appropriates $4 billion for grants to states for wastewater treatment facilities. Additionally, $2 billion has been appropriated to states for drinking water infrastructure projects.

Environment Restoration
EPA Superfund Program projects are allocated $800 million, and $200 million for the EPA Leaking Underground Storage Tanks Program.

Federal Building Modifications
One aspect of energy efficiency is the appropriation of $5.5 billion for federal building and repair projects, $4.5 billion of which must be directed toward projects that achieve the highest levels of energy efficiency. Examples of qualifying projects include installation of photovoltaic cells, smart lights, energy efficient mechanical systems and occupancy sensors.

Low-Income Housing Weatherization
The Weatherization Assistance Program receives $5 billion, which is intended to cover a portion of costs associated with insulating low income residences. The Act also raises the eligibility limit to 200% of the federal poverty line, up from 150%.

Energy Efficiency Block Grant
These Block Grants provide $3.2 billion to state, local and tribal governments to fund public facility renovation projects that emphasize energy efficient building technologies and materials, as well as energy efficient technology demonstration projects.

State Energy Program
The states collect $3.2 billion, which shall fund state energy technology research and development programs.