New Expanded Tax Credit Helps Indiana Move Up Buyers
On November 6, 2009 President Obama signed a bill to both Extend and Expand the Home Buyer Tax Credit. Not only will it be available until Spring of 2010 for First Time Buyers, but it now also includes credits for current homeowners who sell their existing residence and purchase a new one prior to April 30, 2010. So who qualifies and what are the details?
Here are some of the highlights:
How do you apply for the tax credit? You can claim the tax credit on your federal income tax return. Understand, this is a dollar-for-dollar credit, not a tax deduction. If the credit exceeds your tax liability, you will receive a refund. If you've already filed your taxes, you won't need to wait until the following year -- simply file an amendment. We've seen buyers receive the tax credit as soon as 30 days after filing the amendment. This will help offset some of the closing fees or equity shortages for existing homeowners in today's market. In addition, you will be purchasing a new home at a great price for an interest rate still hovering around 5%.
To help clarify some of the details, we've included answers to a few commonly asked questions. For additional questions/answers and examples please visit our website.
- For the Existing homeonwer credit, must the new house cost more than the old house? No. For example individuals who move from a high cost area to a lower cost area, who meet all eligibility requirements will qualify for the $6500 credit.
- I am an existing homeowner. On October 25, 2009 I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. We are closing on November 20. Will I qualify for the new $6500 tax credit? Yes. The existing homeowner credit goes into effect for purchses as of November 6, 2009.
- I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. If the new rules were signed into effect prior to my closing, will I be eligible for a credit? Yes. The new income limitations are in effect as of the date the bill was signed, November 6. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the closing date. So if you close after November 6, you should be eligible for the credit (or a portion of the credit if you're within the phase-out range).
- What if you sold your house months ago, but haven't yet bought a new one? Do you qualify?
- What if you've been renting your home and now sell it? Do you qualify?
- What if you meet the requirements, but your new spouse doesn't? Do you qualify?
Visit our website for answers to these questions and more information!
Originally posted by Steve and Tonda Hoagland on Active Rain Blog
All information deemed reliable but not guaranteed. Please contact a tax account for your specific situation.