2009 First-Time Homebuyer Credit Extended and Expanded
Homebuyers who purchased a home in 2008 or 2009 may be able to claim a generous tax credit. Initially, this tax credit was to expire on November 30, 2009, but it has since been extended and expanded by Congress. The tax credit extends the deadline to purchase and close on a new home to June 30, 2010. In addition, a provision has been added that offers a tax credit to some homebuyers who may be upgrading to a new home even if they previously owned a home.
This is a tax credit, not a tax deduction. If you qualify for the credit, keep in mind that the credit:
The first-time homebuyer credit is good for 10% of the purchase price up to $8,000. The credit does not apply to homes with a purchase price over $800,000. The credit for existing homeowners is 10% up to $6,500. 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.
Buyers filing as single or head-of-household taxpayers can claim the full credit if their modified adjusted gross income is less than $125,000. Married couples filing joint returns are eligible if their combined income is less than $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.
To qualify as a first-time home buyer the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight would be eligible for the $6,500 tax credit.
General Information
This is a tax credit, not a tax deduction. If you qualify for the credit, keep in mind that the credit:
- Applies only to homes used as a taxpayer’s primary residence.
- Reduces a taxpayer’s tax bill or increases the refund, dollar for dollar.
- Is fully refundable. This means the credit will be paid even if the credit is more than the taxpayer owes in taxes.
The first-time homebuyer credit is good for 10% of the purchase price up to $8,000. The credit does not apply to homes with a purchase price over $800,000. The credit for existing homeowners is 10% up to $6,500. 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.
Buyers filing as single or head-of-household taxpayers can claim the full credit if their modified adjusted gross income is less than $125,000. Married couples filing joint returns are eligible if their combined income is less than $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.
Qualifying for the Tax Credits
To qualify as a first-time home buyer the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight would be eligible for the $6,500 tax credit.
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