Frequently Asked Questions- $8000 First-Time Home Buyer Tax Credit

The Homeownership, Worker, and Business Assistance Act of 2009 has extended the $8000.00 tax credit for first-time home buyers. This applies to sales on or after January 1st and on or before April 30th, 2010. Also, if you have a binding contract signed by April 30th and complete the purchase by June 30th, it qualifies as well.

The new income limit is $125,000 for single taxpayers and $225,000 for married couple filing jointly.

The FAQ's that follow provide only basic information. Please contact your accountant or attorney for more in depth information.

Who is eligible to claim the $8000 tax credit?

• First-time buyers purchasing a new or existing home are eligible as long as the purchase date is within the above guidelines. Persons who are under 18 years of age and those who are claimed as dependents by any other taxpayer are not eligible

What is the definition of a first-time home buyer?

This term refers to a buyer who has not owned a principal residence within the last three years

What is the difference in a tax "credit" and tax "deduction?

• A tax deduction is a deduction taken from your gross income to determine your tax liability.
• Tax Credit is an item that reduces your actual tax. It differs from a tax deduction that reduces only your taxable income.
  

EXAMPLE:If your refund normally is $2000.00 you would receive $10,000.00 if you qualified for the full credit.  If you would normally pay taxes equaling $2000.00 you would receive $6000.00 if you qualified for the full credit.

What determines the amount of the credit?

You may take a credit equal to 10% of the purchase price up to $8000

What types of homes qualify for the tax credit?

Any home will qualify as long as it is under $800,000. It can be a single family home, condo, townhouse or manufactured home. You may not purchase a home from any family member including your spouses family members.

Can I qualify for the credit if I pay little or no tax?

Yes. the tax credit is refundable meaning it can be claimed even if you have no tax liability. The government will send a check for the amount of the refundable credit.

Contact me for more information and for available, qualifying homes in the Ft. Benning area which includes: Columbus, Harris County, Phenix City, and Fort Mitchell.