Having the ability to receive a check for $8,000 when you file your taxes next year is almost as good as the invention of sliced bread; however, there are some things you should keep in mind or may not have been aware of.
- To qualify you must be one of two things:
- A true first time homebuyer
- You’ve held no ownership interest in a home for AT LEAST three years prior to the date in which you close on the home
- There is an income cap in order to receive the credit:
- If you make $75,000 ($150,000 if married) or less you are eligible for the entire $8,000
- If you make between $75,000 and $95,000 ($150,000 to $170,000 if married) the credit amount is reduced
- If you make over $95,000 (over $170,000 if married) you are not eligible for the credit
- The amount you receive is dependent upon a couple of things:
- Whether you are single or married
- If you are married and filing joint, you would claim the eligible amount on one return
- If you are married and filing separately you each can claim half of the eligible amount
- If you are single but hold a partial interest in the home see point ‘b'
- Your ownership interest in the home
- If you purchased the home with others you can claim a certain percentage of the total amount received for the credit. For example if two people purchased the home equally, the ownership interest would be 50%; three people 33%, etc…
- There is a possibility that you’ll have to pay back the credit”
- If you sell the home you purchased within three years you may be required to repay the money you received. There are other possibilities, please see form 5405’s instructions for further information regarding repayment requirements.
- The deadline to receive the credit when you file your 2009 taxes is December 1, 2009 . If you do not close on a home before this date you will not be eligible for this particular credit.
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To claim the credit you’ll need to complete form number 5405 and submit it with your tax return next year
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Chanda, Great detail on the tax credit. Easy to understand. Thanks!