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11/06/2009 - Details on the Homebuyer Tax Credit.

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence before April 30, 2010, or closing can occur as late as June 30 as long as you are under contract by April 30, 2010.  And added to this bill is a new credit of up to $6500 for move-up homebuyers.

This credit can be claimed on your tax returns due April 15 or on your 2009 Return.  The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations, and repayment of the credit.

Highlights for First Time Homebuyers

• The First time tax credit is for first-time home buyers only (Have not owned a principal residence during the three year period prior to the purchase).
• The tax credit does not have to be repaid provided the home remains their main home for 36 months after the purchase date.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. 
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
 
Highlights for Move Up Homebuyers

• The tax credit is for home buyers that have lived in one home for five consecutive years in the 8 year period prior to buying their new home.
• The tax credit does not have to be repaid provided the home remains their main home for 36 months after the purchase date.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6500. 
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $125,000 for single taxpayers and $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
 
More details available at http://www.federalhousingtaxcredit.com 

Click here for articles you can download and print. First Time Homebuyer Credit Flyer or Move Up HomeBuyer Tax Credit.