First Time Home Buyer Tax Credit Information Updated February 2010
Pawleys Island Real Estate, Tara Melech, Realtor (843) 907-8787
The first-time home buyers tax credit has now been available for quite some time. If you are looking to take advantage of the tax credit, here are some items that you may not be aware of and some updates to the previous information provided.
- In addition to the first time home buyer tax credit available, there is now a $6,500 Move-Up/ Repeat Home Buyer Tax Credit, of which I will discuss further in a separate post. The first time home buyer tax credit of up to $8,000 can be used on existing or new homes as long as the sale occurs between January 1, 2009 and April 30, 2010. There are some limited exceptions to this date for certain contracts for deed purchases and installment sales. There is also an existing law that allows home sales occurring by June 30, 2010 for eligibility as well, provided that it is due to a binding sales contract that it takes place on or before April 30, 2010.
- Changes to the income limits for claiming the tax credit has changed for sales occuring after November 6, 2009. For single taxpayers, the limit is $125,000. For married taxpayers filing jointly, the limit is $225,000. If you have a modified adjusted gross income of more than $125,000/single or $225,000/jointly the tax credit amount will be reduced by a phaseout range. In other words, if you make more than $145,000/single or $245,000/jointly - then the tax credit amount is reduced to zero. Before the date of November 6, 2009, the limits are $75,000 and $150,000.
- In order for you to claim the first time home buyer tax credit as well as the repeat buyer tax credit, you will need to claim it on your federal tax return. More specificly, IRS From 5405 will allow you to determine the amount of the tax credit, and then input on your income tax form. Even if you end up oweing taxes this tax credit will be used as a credit against what you owe. Example: If you end up owing federal taxes of $3,000, and you claim the $8,000 first time home buyer tax credit, then you will receive a refund in amount of $5,000.
- Any home that will be used as a principal residence will qualify for the credit. The exception to this is that you can not purchase a home from other family members, your spouse, or your spouse's family members.