With the end of the $8000 tax credit nearing closer to its final day and after weeks of negotiation the Senate finally agreed today to extend a popular tax credit for first-time homebuyers while offering a reduced credit to some repeat buyers of up to $6,500 for those who have owned their current homes for at least five years.
The tax credit plan will remain in effect for homebuyers who sign sales agreements until end of April 2010. Then they will have until the end of June 2010 to close on their new homes.
The Senate also negotiated the expansion of a separate tax credit that will let businesses, which are losing money, to get refunds for taxes paid in previous years which will provide them with an immediate source of cash flow.
Both Republican and Democrats in the Senate were hoping to add both new tax provisions to a bill that was supposed to give people running out of unemployment insurance benefits an additional 20 weeks of federal aid. The reason for this is that popular bills such as the one to extend unemployment benefits often attract other amendments that may have a difficult time passing on their own merit.
Lawmakers were still negotiating on several unrelated amendments late into the night, but the Senate may vote on the overall bill as early as today.