HOMEBUYER TAX CREDIT - Extended Until 6/30/2010 As Modified in the American Recovery and Reinvestment Act Recently, I have been getting a lot of phone calls and e-mails asking me questions about the $8000 home-buyer tax credit so I wanted to answer the most asked questions and make it as simple as possible. So who gets the credit? First-time home buyers who are defined as someone who hasn't owned a home in the last three years. If you are married, both are subject to not having owned a home in the last three years. ***Also, this credit has been extended to those who have owned a home for five of the last eight years. Let's call you "Step Up" buyers, even though you may be downsizing, it's okay, you still will qualify! This must be your primary residence so if you haven't sold (or lost) your home or do not intend to live there, you can not qualify. How much is the credit? $8000 or 10% of the home's value, whichever is less for first timers (defined above) and $6500 for Step-up buyers. What do you have to do to get it? Claim it on your taxes. It's totally refundable, meaning tax filers see a refund of the full amount even if their total tax bill - the amount of withholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount Is there a deadline? The purchaser must be under contract by 4/30/10 and closed by 6/30/10 in order to qualify. Do you have to pay the money back? If you reside in the home for three years, you do not have to pay it back. Are there any restrictions? Yes. buyers must make less than $125,000 for singles or $225,000 for couples. Higher-income buyers may receive a partial credit. Is it easy to apply for the credit? Yes. It's as easy as filing your taxes. It's a great incentive if you are a first-time home buyer. With low interest rates, low home prices, plenty of inventory and now this tax credit, I find myself wishing that I was a first-time home buyer again. If you are on the fence, it may be time to jump off |