8,000 Dollar Tax Credit The maximum credit is $8,000 or 10% of the home purchase, whichever is less. The credit is available for homes purchased on or after November 6, 2009 and before June 30, 2010. However contracts must be fully ratified before May 1, 2010. To qualify for the full tax credit, married couples' modified adjusted gross income (MAGI) should be under $225,000 (up from $150,000) and single filers' MAGI should be less than $125,000 (up from $75,000). Partial tax credits may be available for married couples with MAGI incomes of over $225,000 but under $245,000 and single filers with incomes over $125,000 but under $145,000. If married couples who qualify for the first-time tax credit file separately, they would both claim 5% of the home purchase or $4,000 each (whichever is less) on their tax returns. There is no recapture or repayment clause IF the home is owned for at least 36 months. Current Homeowner: An individual (and, if married, an individual's spouse) who has owned and used the same residence as a principal residence for any 5-consecutive-year period during the 8 year period ending on the date of the purchase of a new principal home will be eligible for a $6,500 tax credit ($3,250 married filing separate). The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes. Home purchase cap of $800,000 (no cap in previous version). Special exemptions and extensions for military, members of the Foreign Service of the United States, and employees of the intelligence community: If such individual serves on official extended duty outside of the United States for at least 90 days between December 31, 2008 and May 1, 2010 the deadline for entering into a binding contract to purchase a home will be extended to April 30, 2011. Closing must be before July 1, 2011. Credit is only available to purchasers who are at least 18 years old. This version now requires that the home purchaser attach a properly executed copy of the settlement statement used to complete the purchase to the tax return. Please seek legal and/or tax advise from qualified professionals. David Walker is a Real Estate Broker and is not a legal or tax professional. If you purchased a home between January 1, 2009 and November 6, 2009 you will fall under the original tax credit guidelines. See Below The American Recovery and Reinvestment Act of 2009 Tax credit has been increased to $8,000. Homes have to be purchased between January 1, 2009 and November 30, 2009 but sales after November 7, 2009 see the New Version above. No repayment/recapture clause for homes sold after 36 months of occupancy and ownership. The Tax Credit is for home buyers (either spouse if filing jointly) who have NOT owned a principle residence during the three-year period prior to the purchase. Ownership of vacation property or rental property does not disqualify home buyers from this program. The maximum credit is $8,000 or 10% of the home purchase, whichever is less. The credit is available for homes purchased on or after January 1, 2009 and before December 31, 2009. To qualify for the full tax credit, married couples' modified adjusted gross income (MAGI) should be under $150,000 and single filers' MAGI should be less than $75,000. Partial tax credits may be available for married couples with MAGI incomes of over $150,000 but under $170,000 and single filers with incomes over $75,000 but under $95,000. If married couples who qualify for the first-time tax credit file separately, they would both claim 5% of the home purchase or $4,000 each (whichever is less) on their tax returns. Home buyers who qualify for this program, but who do not intend to purchase a home till the end of 2009, may elect to alter their tax withholdings (up to the amount of the of the tax credit) in order to save up money for a down payment. However, if the purchase of the home does not occur, the taxes must be repaid to the IRS. There is no recapture or repayment clause IF the home is owned for at least 36 months. The effective date of purchase for new construction (even if buyer owns title to the lot) is the date the owner first occupies the house. So even if construction began in 2008, as long as the home and buyers qualify for the tax credit, they will be eligible if they take possession any time during 2009. However, new construction bought from the builder is only eligible if the settlement date (closing) takes place between January 1, 2009 and December 31, 2009. The law allows taxpayers to elect to treat qualified 2009 purchases as a 2008 purchase so that they can receive the tax credit on their 2008 tax returns. The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes. First-Time-Home Buyers 8,000 Dollar Tax Credit |
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