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Housing Tax Credit, New Markets Tax Credit, and Business Incentives Included in the American Recovery and Reinvestment Act of 2009

February 24, 2009

By ALAN S. COHEN, MICHAEL D. HAUN, SEAN C. HONEYWILL, & KEVIN YOUNG

The American Recovery and Reinvestment Act of 2009 (the Act) extends several tax stimulus provisions of the Internal Revenue Code of 1986, as amended (the Code), through 2009, including 50 percent bonus depreciation and the increased limit on the expensing of qualifying capital expenditures.

Notably, several provisions originally included in either the House or Senate version of the Act are not included in the final conference version, including the five-year extension of the carryback period for net operating losses (NOL) for most businesses and general business credits, as well as a low-income housing tax credit (LIHTC) acceleration provision. While the Act provides a five-year NOL carryback, the carryback only applies to losses that occurred in 2008 for businesses with less than $15 million in annual receipts. The House and Senate versions of the legislation would have extended the carryback period to five years for all businesses for credits recognized in 2008 and 2009.

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