First Time Homebuyer Credit Extended

The first time homebuyer $8,000 tax credit has been extended beyond the orginal November 30th deadline.  First time homebuyers now have until April 30, 2010 to entering into a binding contact to purchase a home and must close on that home by June 30, 2010.  For qualifying purchases of principal residences, first time homebuyers can claim this credit on either their 2009 or 2010 tax return.

There is also a new credit for homeowers looking to buy a new home.  If you have lived in your home for 5 consecutive years during the last 8 year period ending on the date of the new home purchase, then you may qualify for a $6,500 tax credit.

People with higher incomes may now also qualify for one of these credits when they were not able to before.  The new phase out for single filers starts with a modified adjusted gross income of $125,000-$145,000 and for joint filers at $225,000-$245,000.

These new credits are available starting after November 6th and have several new restrictions applied to them.

1.  Purchaser must attached the settlement statement to their tax return.

2.  No credit is available if the house purchase price exceeds $800,000.

3.  Purchaser must be at least 18 years old.

4.  A dependent is not eligible for the credit.

5.  The new law gives the IRS broader authority to deny the credit claims without first having to audit the return.

Remember that these credits only apply to the purchase of your principal residence.  If you have questions about whether or not you qualify for one of these credits, please consult with your tax advisor.

 

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