The Home Buyer Tax Credit Has NOT Been Extended — A Civics Lesson As Taught By Schoolhouse Rock

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Despite what you're hearing, the federal home buyer tax credit has not been extended beyond its June 30, 2010 deadline to September 2010. At least not yet.

Here's the back-story.

Helping Homeowners Claim Expiring Credits

When the tax credit was last modified in November 2009, Congress modified its language to read that, in order to be eligible, a homeowner must be under mutual contract for a home on or before April 30, 2010, and must be closed on said home on or before June 30, 2010.

60 days between contract and close, industry lobbyists reasoned, would be ample time to execute.  Turns out, they were wrong.

A surge in April purchase activity created back-office back logs at the nation's biggest banks and an estimated 180,000 home buyers are finding out the hard way that lenders don't always clear conditions as quickly as you'd like.

There's a lot of tax credit money at stake and Congress is trying to do something about it.

How A Tax Credit Extension Bill Becomes The Law

First things first -- the tax credit date change is not its own bill. The extension proposal is tagged onto a broader bill of tax policy extensions and federal program renewals.  This means that the fate of the home buyer credit won't be on the merit of the credit alone.

It also means that the bill may not become law in time for June 30, 2010.  The extension has passed the Senate but there's still two steps to go (and loads of debate).

I made direct mention of this on Twitter Thursday:

It takes more than a Senate passage to extend the home buyer tax credit.  It takes a vote in the House of Representatives plus a signature from the White House, too.  So far, we're not there.

What If You Miss The June 30, 2010 Tax Credit Deadline?

Some people will miss the deadline.  You may be one of them.  For now, there's no outlet and no relief.

Technically, Congress could pass the law prior to June 30 and everyone will be fine, or it could pass the law after June 30 and make the credit retroactive for everyone that missed it.  But, again, for now, nothing.

Schoolhouse Rock teaches us that.