Homebuyer Tax Credit Forms and Rules Now in Place
For the purpose of this credit, a first time homeowner is defined as one who has not owned a home for the 36 months ending on the date of purchase.
The Treasury Department has moved at record speed to implement one piece of the new American Recovery and Reinvestment Act of 2009 (aka the Stimulus Act).
The Treasury Department and the Internal Revenue Service which will manage this credit announced on Wednesday, February 25th, that forms and regulations are already in place for homebuyers who wish to claim the first-time credit enabled under the act.
The credit is available to homebuyers who purchase a home before December 1 of this year. In an effort to make the effects of the credit felt quickly in the economy, homebuyers can claim the credit either on their 2009 tax return or if they have already purchased a home in 2009, can claim the credit immediately on the 2008 return due by April 15.
The tax credit represents 10 percent of the purchase price of a home up to a maximum of $8,000 or $4,000 for married taxpayers filing separate returns. The $7,500 credit that was authorized under earlier legislation last year was actually a 15 year loan; the new tax credit does not have to be repaid by the homeowner under ordinary circumstances. It does have to be repaid if the homeowner sells the home in less than 36 months or if the home ceases to be his principal residence during that time.
The credit is available to taxpayers with adjusted gross incomes up to $75,000 or $150,000 for married taxpayers filing jointly. Above those income levels the credit is phased out gradually.
Homeowners who purchased a house between April 8 and December 31, 2008 are not eligible for the new credit. They are covered by the earlier legislation and can claim the $7,500 repayable credit.
Forms and instructions for claiming the credit on 2008 tax returns are available at www.irs.gov. The form number is 5405.