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HOMEBUYERS
TAX CREDIT EXTENDED AND EXPANDED!
$8000
TAX CREDIT
FOR
FIRST TIME HOMEBUYERS (IF YOU HAVE NOT OWNED A HOME DURING THE
LAST THREE YEARS, YOU ARE CLASSIFIED AS A FIRST TIME
HOMEBUYER!) HAS
BEEN EXTENDED
AND
CONGRESS EXPANDED A $6500
TAX CREDIT FOR
EXISTING
HOMEOWNERS!
RISMEDIA,
November 6, 2009—President Barack Obama has approved the
first-time homebuyer tax credit extension which will extend
the tax credit until April 30, 2010.
The extension is part of a $24 billion economic stimulus bill
that will extend the $8,000 tax credit for homebuyers who are
purchasing their first home from the current November 30
deadline and expands the program to offer a credit of $6,500
to homeowners who have lived in their current home for at
least five years and are seeking to relocate.
The
following details apply to the homebuyer tax credit expansion:
Who is Eligible
-First-time homebuyers, who are defined by the law as buyers
who have not owned a principal residence during the three-year
period prior to the purchase, may be eligible for up to an
$8,000 tax credit.
-Existing homeowners who have been residing in their principal
residence for five consecutive years out of the last eight and
are purchasing a home to be their principal residence
(“repeat buyer”), may be eligible for up to a $6,500 tax
credit.
-All U.S. citizens who file taxes are eligible to participate
in the program.
Income
Limits
Homebuyers who file as single or head-of-household
taxpayers can claim the full credit ($8,000 for first-time
buyers and $6,500 for repeat buyers) if their modified
adjusted gross income (MAGI) is less than $125,000.
-For married couples filing a joint return, the combined
income limit is $225,000.
-Single or head-of-household taxpayers who earn between
$125,000 and $145,000, and married couples who earn between
$225,000 and $245,000 are eligible to receive a partial
credit.
-The credit is not available for single taxpayers whose MAGI
is greater than $145,000 and married couples with a MAGI that
exceeds $245,000.
Effective
Dates
-The eligibility period for the tax credit is for homes
purchased after Nov. 6, 2009, and before May 1, 2010. However,
home purchases subject to a binding sales contract signed by
April 30, 2010, will qualify for the tax credit provided
closing occurs prior to July 1, 2010.
Types
of Homes that Qualify
-All homes with a purchase price of less than $800,000
qualify, including newly-constructed or resale, and
single-family detached, townhomes or condominiums, provided
that the home will be used as their principal residence.
Vacation home and rental property purchases do NOT qualify.
Tax
Credit is Refundable
-A refundable credit means that if the amount of income taxes
you owe is less than the credit amount you qualify for, the
government will send you a check for the difference.
-For example:
-A first-time buyer who qualifies for the full $8,000 credit
who owes $5,000 in federal income taxes would pay nothing to
the IRS and receive a $3,000 payment from the government. If
you are due to receive a $1,000 refund, you would receive
$9,000 ($1,000 plus the $8,000 first-time homebuyer tax
credit).
-A repeat buyer who owes $5,000 would pay nothing to the IRS
and receive $1,500 back from the government. If you are due to
get a $1,000 refund, you would get $7,500 ($1,000 plus the
$6,500 repeat buyer tax credit).
-All qualified homebuyers can take the tax credit on their
2009 or 2010 income tax return.
Payback
Provisions
The tax credit is a true credit. It does not have to be repaid
unless the home owner sells or stops using the home as their
principal residence within three years after the purchase.
The www.federalhousingtaxcredit.com
site is being updated. Check the site next week for more
detailed information on the new tax credit.
For more information, visit http://www.nahb.org
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Buyer
Information 
