*****EXTENDED THROUGH APRIL 30, 2010 AND EXPANDED TO OFFER UP TO A $6,500 TAX CREDIT FOR QUALIFYING REPEAT BUYERS*****
$8,000 TAX CREDIT EXPLAINED
WHAT IS THE FIRST-TIME HOMEBUYER TAX CREDIT?
A feature of the American Recovery and Reinvestment Act of 2009, the temporary credit is an incentive for first-time buyers to purchase a home. The credit is equal to 10 percent of the cost of the home, up to a maximum credit of $8,000.
WHO QUALIFIES?
First-time buyers who purchase a home between January 1, 2009 and before December 1, 2009. A person qualifies as a first-time buyer if the individual - and his/her spouse if married - has not owned a home in the three years prior to the day of purchase.
WHICH PROPERTIES ARE ELIGIBLE?
Any single-family homes (including condos, co-ops and townhouses) that will be used as a primary residence.
ARE THERE INCOME GUIDELINES?
Yes. Individuals with an adjusted gross income up to $75,000 (or $150,000 if filing jointly) are eligible for the full tax credit. The credit is phased down for those earning more and is not available for those with an income above $95,000 (or $170,000 if filing jointly).
HOW DOES IT WORK?
Buyers claim the credit on their federal tax return to reduce their tax liability. If the credit is more than their total tax liability that year, the buyer gets a refund check for the balance.
DOES THE $8,000 CREDIT HAVE TO BE REPAID?
No, as long as the buyer stays in the home for at least three years. If the home is sold within three years of the date of purchase, the buyer is required to pay back the full amount of the credit, including any refund received.
|
