Senate Votes to Extend Homebuyer Credit - Potential College Planning Opportunity

The Senate voted 98-0 today to extend the deadline for the first-time homebuyer credit. Prior to the vote today, the credit was expected to expire November 30th, 2009.

If the House of Representatives also approves the bill and the President signs off on it, the deadline to purchase a new home and claim the $8,000 credit will be extended to contracts signed by April 30th, 2010. 

Even better, the new legislation if approved will potentially allow homebuyers that have previously owned a home in the last five years to claim a $6,500 credit on new purchases.

What could all this have to do with paying for college?

A whole lot. For parents who are considering downsizing their empty nest, or that are getting back on their feet towards the end of this recession, $6,500 - $8,000 can easily pay for a full year of college at many schools.

So, if this bill becomes law, parents planning on buying a home in the next six months should talk to a tax preparer about when they can expect a refund and what size it'll be. Knowing this ahead of time may keep a parent or student from taking out loans, tapping their 401k to pay tuition, or withdrawing from a higher priced school.