Extended Homebuyer Tax Credit
Extended Homebuyer Tax Credit
What you should know about the Extended Homebuyer Tax Credit
The American Recovery and Investment Act of 2009 has been extended to feature an $8,000 tax credit for first-time home buyers who purchase a home on or up until April 30, 2010.
Additionally, it expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Who Qualifies for the Extended Homebuyer Tax Credit?
First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010 are eligible for the credit. A first-time buyer is defined under the tax credit as an individual who has not owned a home in the last three years. For married joint filers, both must meet the first-time homebuyer test to take the credit on a joint return.
First-time buyers who purchased a home between January 1, 2009 and November 6, 2009, should refer to the original version of the 2009 First-Time Home Buyer Tax Credit.
Current home owners purchasing a home between November 7, 2009 and April 30, 2010 are eligible for a credit up to $6500. A current home owner is someone who has used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
Under the Extended Home Buyer Tax Credit, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum tax credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
What kind of home can I buy with the Extended Homebuyer Tax Credit?
Eligible properties include anything that will be used as a principle single-family residence – including single-family homes, condos, townhouses and co-ops. Homes must be purchased for $800,000 or less.
How does the Extended Homebuyer Tax Credit work?
The credit is equal to 10 percent of the cost of the home, up to the maximum credit.
The tax credit does not have to be repaid if the buyer stays in the home at least three years. But if the home is sold before that, the entire amount of the credit to recaptured on the sale.
How do I claim the Extended Homebuyer Tax Credit?
Buyers claim the credit on their federal tax return to reduce their tax liability. If the credit is more than their total tax liability for that year, the buyer will get a refund check for the balance.
For more details about the Extended Homebuyer Tax Credit, visit
www.IRS.gov.
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