February 20th, 2010 8:18 AM by Cat Moe
The Basics: Extended Home Buyer Tax Credit 2009/2010
• Extends the First-Time Home Buyer Tax Credit of up to $8,000 tofirst-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current homeowners purchasing a new or existing home between November 7,2009 and April 30, 2010.
Here is some basic information about how the Extended Home Buyer TaxCredit can help prospective home buyers become part of the Americandream. If you have specific questions or need additional information, pleasecontact a tax professional or the Internal Revenue Service at 800-829-1040.
Who Qualifies for the Extended Credit?• First-time home buyers who purchase homes between November7, 2009 and April 30, 2010.• Current home owners purchasing a home between November 7,2009 and April 30, 2010, who have used the home being sold orvacated as a principal residence for five consecutive years withinthe last eight.To qualify as a “first-time home buyer” the purchaser or his/her spousemay not have owned a residence during the three years prior to the purchase.
Which Properties Are Eligible?The Extended Home Buyer Tax Credit may be applied to primaryresidences, including: single-family homes, condos, town homes, and co-ops.
How Much Is Available?The maximum allowable credit for first-time home buyers is $8,000.The maximum allowable credit for current homeowners is $6,500.
How is a Buyer’s Credit Amount Determined?Each home buyer’s tax credit is determined by two additional factors:1 - The price of the home.2 - The buyer’s income.
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
Under the Extended Home Buyer Tax Credit, which is effective onNovember 7, 2009, single buyers with incomes up to $125,000 andmarried couples with incomes up to $225,000—may receive themaximum tax credit.These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits.
If the Buyer(s)’ Income Exceeds These Limits, Can He/SheStill Get a Credit?Yes, some buyers may still be eligible for the credit. The credit decreases for buyerswho earn between $125,000 and $145,000 for single buyers and between $225,000and $245,000 for home buyers filing jointly. The amount of the tax credit decreases ashis/her income approaches the maximum limit. Home buyers earning more than themaximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30,2010?Under the Extended Home Buyer Tax Credit, as long as a writtenbinding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?No. The buyer does not need to repay the tax credit, if he/she occupiesthe home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.