Homebuyer Tax Credit
Expired April 30, 2010
(less than 75 days away)
The Tax Credit for homebuyers expires in less than 75 days. All binding sales contracts must be in force by April 30th and close before July 1st if the buyers wish to receive the credit ($8,000 for first time homebuyers and $6,500 for repeat buyers).
Below is all the information on the program as well as who qualifies. Please feel free to contact me for more information at 203-259-6789. Thanks- Fredda
The Worker, Homeownership and Business Assistance Act of 2009 signed into law on November 6, 2009 has extended and enhanced the first‐time homebuyer tax credit and is effective currently.
Highlights of this credit include:
· First‐Time Homebuyer: A refundable credit equal to the lesser of 10% of the purchase price or $8,000; refundable meaning the tax credit
can offset your entire federal income tax liability (including Alternative Minimum Tax) with any leftover amount being refunded to you.
· Existing Homeowner: A refundable credit equal to the lesser of 10% of the purchase price or $6,500. To qualify, you must have lived in
your current home consecutively for 5 of the previous 8 years.
· The purchase price cannot exceed $800,000.
· The tax credit is for homes purchased before May 1, 2010. If there is a written binding contract in effect before May 1, 2010, you have an
additional 60 days to close (before July 1, 2010).
· Single taxpayers with income up to $125,000 and married taxpayers with income up to $225,000 qualify for the full amount of the credit.
The credit begins to phase‐out with income above those limits and is phased out completely for single taxpayers with income over
$145,000 and married taxpayers over $245,000.
· You are considered a first‐time homebuyer if you did not own a home during the 3‐year period before the purchase of the home. If you
are married, both you and your spouse must pass the 3‐year test.
· The home you are purchasing must be in the United States and used as your primary residence. Vacation homes and rental properties do
not qualify for the credit.
· You are not eligible for the credit if you are under age 18 at the time of purchase, can be claimed as a dependent by another taxpayer or
if you buy the home from a close relative, for example, a spouse, parent or child.
· You will be required to repay the credit if you sell your home within 3 years of purchase.
· Special rules extend the credit an extra year for military personnel on qualified official extended duty outside of the U.S. Also, the
recapture provisions are waived under certain circumstances.
· You can treat the 2009 purchase as having been made during 2008 and claim the credit on your 2008 tax return. Any 2010 purchase can
be claimed on your 2009 return. You must attach documentation of the purchase to your tax return.
Key Facts/Figures:
|
Credit Amount – First Time Homebuyer |
Lesser of 10% of purchase price or $8,000 |
|
Credit Amount – Existing Homeowner |
Lesser of 10% of purchase price or $6,500 ($3,250 if married filing separately) |
|
Purchase Price Limitation |
$800,000 |
|
Income Limits Phase‐Out |
Single $125,000‐145,000/Married $225,000‐245,000 |
|
Date of Purchase (with written binding contract) |
Before 5/1/2010 |
|
Date of Closing (for purchases contracted before 5/1/2010) |
Before 7/1/2010 |
|
Effective Date of New Law |
11/6/2009 |