Tax credits, other benefits slated to expire
Unemployment benefit extensions aren’t the only items at risk of expiring at the end of the year.
A number of tax credits, loan terms and other provisions are scheduled to go out the window.
One tax credit set to expire at the end of the month is the Making Work Pay tax credit, which reduces the amount withheld from paychecks by $400 for single people and $800 for joint tax filers. Also scheduled to disappear are:
The American Opportunity Tax Credit increase of $700 as the maximum award for people earning $80,000 or less a year.
The Work Opportunity Tax Credit for businesses that hire hard-to-place unemployed people.
And the ability to include computer equipment as a deductible item for higher-education expenses.
The Small Business Association guarantees 90 percent of the amount of 7(a) loans and waives its fees associated with the loan, but those perks will expire Dec. 31 without an extension from the federal government. The loan helps start-up businesses and existing small businesses that are struggling to find financing through traditional means.
The loan guarantee will drop to 75 percent for loans above $150,000 and to 85 percent for those at or below $150,000 in the new year, according to the Small Business Administration.
High-roller homeowners also may feel some heartburn next year. Dec. 31 is the expiration date for Fannie Mae and Freddie Mac to support loans of up to nearly three-quarters of a million dollars. The cap will decrease to $417,000 for a single home in January in most U.S. counties, including Mesa and 55 other Colorado counties, according to a chart released by the Federal Housing Finance Agency.
The change won’t affect the bulk of local homebuyers looking for financing, according to Jon Crawford, a Realtor with Bray Real Estate in Grand Junction. Homes costing more than half a million dollars, although in plentiful supply, aren’t selling often here, he said. Still, the decreased cap for so-called “jumbo loans” “certainly won’t help” more expensive homes move out of the market, Crawford said.
“It will hurt somewhat,” he said.