Tax Credit for First Time Homebuyers Extended
Posted by Sandra Israelson on Sunday, November 29th, 2009 at 10:17am.Congress has extended the tax credit for first time homebuyers.
How much is the credit?
This credit is for the higher of $8,000 or 10% of the purchase price of the home. So if you purchase a home for, say, $70,000, then your credit will be for only $7,000. And remember that a tax credit is a return of the whole amount. It's not like a deduction, where it benefits you by only 15% or so. Also, you may file an amended tax return and get your refund immediately - no need to wait until the following year when you submit your regular tax return.
Who qualifies for this tax credit?
1) A first time homebuyer is defined as someone who has not owned a home within the last 3 years. So even if you owned a home back in 2006 or earlier, you qualify for this tax credit.
2) You can't claim the credit to purchase a second home, vacation home, or rental property - it must be to purchase a home that you use as your primary residence.
3) You must be at least 18 years old and not being claimed as a dependent by any other taxpayer.
4) If you're single, you must earn no more than $125,000 per year to get the full credit. The income limit for married couples is $225,000. However, partial credits are available for incomes up to $145,000 for singles and $245,000 for married couples.
5) You need to maintain the home as your primary residence for at least 3 years from your date of purchase. If you sell it before then, the IRS will want some or all of your credit returned.
When do I need to purchase to get this credit?
The credit has been extended through April 30, 2010.
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