Home Buyers Tax Credit

Do you want $8000 back on the purchase of your Dream Home? Who doesn’t?!

In early November 2009, Congress passed new legislation that may benefit YOU! This legislation:

• Extends a Home Buyer Tax Credit of up to $8,000 to first-time home buyers who put a home under contract by April 30, 2010.
• Expands the program to grant up to $6,500 credit (up to $3,250 credit for a married individual filing separately) to current home owners (aka “move-up buyers”) who put a home under contract by April 30, 2010.
• As long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser(s) will have until June 30th, 2010 to close.
• For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
• The credit does not have to be paid back unless the home ceases to be the taxpayer’s main residence within a three-year period following the purchase.
• In addition, some people with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers.

Current Home Owners: You must have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

First-Time Home Buyers: To qualify, you or your spouse may not have owned a residence during the three years prior to the purchase.

Please note that this information is about the NEW version of the program, which was enacted in early November 2009. The old version was limited to first-time home buyers.

If you think you qualify and you want to participate in this program, let’s find you a home today!

Additional information:

The National Association of REALTORS has several handy publications about the Home Buyers Tax Credit:

• NAR Frequently Asked Questions (FAQ): Homebuyer Tax Credit Changes
• Using the Home Buyer Tax Credit as a Down Payment on a FHA-Insured Mortgage

The IRS has published information about the Homebuyer Tax Credit as well as a question-and-answer page with different scenarios.

(A Tax Professional or the Internal Revenue Service at 800-829-1040 are the best sources for the detailed answers to your questions about how this program affects you as a taxpayer.)