Home Buyer Tax Credit
Frequently Asked Questions
About the First-Time Home Buyer Tax Credit
The
Worker, Homeownership, and Business Assistance Act of 2009 has extended
the tax credit of up to $8,000 for qualified first-time home buyers
purchasing a principal residence. The tax credit now applies to sales
occurring on or after January 1, 2009 and on or before April 30, 2010.
However, in cases where a binding sales contract is signed by April 30,
2010, a home purchase completed by June 30, 2010 will qualify.
For
sales occurring after November 6, 2009, the Act establishes income
limits of $125,000 for single taxpayers and $225,000 for married
couples filing joint returns.
The income limits for sales
occurring on or after January 1, 2009 and on or before November 6,
2009, are $75,000 for single taxpayers and $150,000 for married
taxpayers filing joint returns.
The following questions and
answers provide basic information about the tax credit. If you have
more specific questions, fill out the form below and I would be happy to help you further!
Who is eligible to claim the $8,000 tax credit?
First-time home buyers purchasing any kind of home—new or resale—are
eligible for the tax credit. To qualify for the tax credit, a home
purchase must occur on or after January 1, 2009 and on or before April
30, 2010.
What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a
principal residence during the three-year period prior to the purchase.
How is the amount of the tax credit determined?
Are there any income limits for claiming the tax credit?
The income limits for claiming the tax credit were raised when the tax credit was extended. Are the higher limits retroactive?
Frequently Asked Questions
About the Move-Up/Repeat Home Buyer Tax Credit
The
Worker, Homeownership, and Business Assistance Act of 2009 has
established a tax credit of up to $6,500 for qualified move-up/repeat
home buyers (existing home owners) purchasing a principal residence
after November 6, 2009 and on or before April 30, 2010 (or purchased by
June 30, 2010 with a binding sales contract signed by April 30, 2010).
The following questions and answers provide basic
information about the tax credit. If you have more specific questions,
fill out the form below and I would be happy to help you further!
Who is eligible to claim the $6,500 tax credit?
Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.
The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date.
How is the amount of the tax credit determined?
The tax credit is equal to 10 percent of the home’s purchase price up
to a maximum of $6,500. Purchases of homes priced above $800,000 are
not eligible for the tax credit.
Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $125,000; the limit is
$225,000 for married taxpayers filing a joint return. The tax credit
amount is reduced for buyers with a modified adjusted gross income
(MAGI) above those limits.
What is “modified adjusted gross income”?
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Can you give me an example of how the partial tax credit is determined?
How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008? How is this different than the rules established in early 2009?
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