Federal- First Time Homebuyer Tax Credit
- The tax credit is for first time home buyers only, purchasing any kind of home, new or resale. The law defines "first time home buyer" as a buyer who has not owned a principal residence during the 3-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
- The tax credit does not have to be repaid. The tax credit is also refundable, meaning that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset.
- The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000. The stimulus bill just signed by President Obama raised the new home buyer tax credit from $7,500 to $8,000.
- The tax credit is available for homes purchaed on or after January 1, 2009 and before December 1, 2009. For the purpose of the tax credit, the purchase date is the date when closing occurs.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. Partial tax credits are available for individual taxpayers with a modified adjusted gross income of up to $95,000 and for married taxpayers filing joint returns with an AGI of up to $170,000.
Additional information about the tax credit can be found on the websites of the National Association of Realtors (www.realtor.org) and the National Association of Home Builders (www.nahb.org).
