As part of the American Recovery and Reinvestment Act of 2009, a.k.a. the Stimulus Bill, first time home buyers are now eligible for a tax credit of $8,000. The following summarizes this credit.
Timing--Home owners who purchase their houses between January 1, 2009 and December 1, 2009 are eligible for the credit.
First Time Home Buyer--The law states that the credit is available to first time home buyers. However, the law is flexible and allows anyone who has not owned a home for three years to qualify.
Claiming the Credit--You will receive the tax credit when you file your individual tax return. As part of this filing, you will need to complete Form 5405 which determines the amount of credit you will receive. The credit can be claimed on either your 2008 or 2009 tax return. If you have already filed for 2008, you can amend the return to obtain the credit.
Credit vs. Deduction--This is a CREDIT not a DEDUCTION. A tax credit is a dollar for dollar benefit to the tax payer. Unlike the 2008 "credit "of $7,500 the 2009 credit does not have to be repaid.
Credit Limits--The credit shall be equal to 10% of the purchase price of the home, not to exceed $8,000.
Income Limits--Single taxpayers with incomes up to $75,000 and couples with incomes up to $150,000 qualify for the full credit.
This information is not meant to be tax or legal advice.
Please contact me for further information.
Julie Ohs--Realtor
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