$8,000 First Time Homebuyer Tax Credit

In our quest to continue to provide excellence to you, please find below the key points of the First Time Homebuyer Tax Credit that became law through the American Recovery and Re-Investment Act of 2009 . If this information is not applicable to you, feel free to pass it on to your friends and family. We appreciate your trust. Please note that all information may not be exact and you should always contact your accountant for exact details

Feature

American Recovery and Re-Investment Act of 2009

Amount of Credit Ten Percent of the cost of home, not to exceed $8000.

Examples:

  • If a home costs $65,000, the allowable credit would be $6,500.
  • If a home costs $120,000, then the allowable credit would be $8,000.
Eligible Property Any single-family residence (including condos) that will be used as a primary residence.
Refundable Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year.

Individuals should consult a professional tax advisor for exact tax calculations.

Examples:

  • If an individual’s actual tax liability was $5,000, then after the tax credit is applied the purchaser would receive a total refund of $3,000. The refundable amount is the difference between the $8000 tax credit and the amount of one’s tax liability.
  • If an individual’s actual tax refund was $2,000, then after the tax credit is applied the purchaser would receive a total refund of $10000.
Income Limit Individuals whose Form 1040 filing status is single (or head of household) are eligible for the tax credit if their income is no more than $75,000. Individuals who file a joint return may have no more than $150,000 in income. Individuals with incomes between $75,001 and 94,999 (single) or $150,001 and $169,999 (joint returns) are eligible for a partial tax credit. Individuals with incomes greater than $95,000 (single) or $170,000 (joint return) are not eligible for this tax credit.
First-time Homebuyer Only Purchaser (and purchaser’s spouse) may not have owned a principal residence in three years previous to purchase. U.S. citizens only.
Recapture The tax credit DOES NOT have to be repaid as long as you live in the property without selling it for at least 3 years.
Effective Date Closings on or after January 1, 2009 until December 1, 2009