Last week I wrote about the First Time Homebuyer Tax Credit being extended and the addition of the Current Homeowners Credit.  Now that it is signed and ready to go I thought I would let you know what the differences were from that blog to the actual signed extension.

One of the changes is that the Current Homeowners Credit was called a refund, now it is a credit. 

Clarification of the amount of the tax credit for First Time Homebuyers is the credit is for 10% of the purchase price of the house up to $8000.00.  If you are a single income filer then you can receive up to the full amount if you earn up to $125,000.  You can receive a partial amount if you earn over that but less then $145,00.  If you file jointly you can receive up to the full amount if you earn up to $225,000, and a partial amount if you earn up to $245,000.  Please be sure and consult your lender to get the full scoop on this.

So you now are asking what good will this tax credit do me?  Well for one, know that you will not go to the closing table and receive the credit on your HUD statement nor will you receive a check at closing.  The benefit of the tax credit is at tax time.  You will receive a dollar for dollar credit on the amount you owe the IRS.  If you owe $8000 and get the full credit, then you will owe the IRS nothing.  If you owe the IRS $4000 and get the full credit you will receive a refund check for $4000.  If you owe the IRS $9000 and receive the full credit then you will only have to write a check for $1000.

For more information on this credit, go the link above.  But for the very best in depth information go to your lender to see what you qualify for and how best to implement it. 

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