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Time Running Out for First-Time Homebuyer Credit
2009-09-15
Many taxpayers who purchase a home this year will qualify for an $8,000 federal tax credit.  The refundable first-time homebuyer credit is a major tax provision in the American Recovery and Reinvestment  Act of 2009, but time is running out to qualify for this credit.

Ten facts about the first-time homebuyer credit include:
  1. To be considered a first-time homebuyer, you --- and your spouse if you are married --- must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
  2. You cannot claim the credit before there is a completed sale and purchase of the residence.  The sale and purchase are generally completed at the time of closing on the purchase.
  3. To qualify for the credit, the completed purchase must occur before December 1, 2009.
  4. The home must be located in the United States.
  5. The credit is either 10% of the purchase price of the home or $8,000, whichever is less.
  6. The amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000 or $150,000 for joint filers.
  7. The credit is fully refundable.  A homebuyer with no taxable income, who qualified for the credit, may file for the sole purpose of claiming the credit and receive a refund.  The credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
  8. The credit is claimed on IRS Form 5405, First-Time Homebuyers Credit.
  9. Taxpayers can claim the credit for a qualified 2009 purchase on either their 2008 or 2009 tax return.  For those who have filed a 2008 return, a Form 1040X, Amended U.S. Individual Income Tax Return, can be filed in order to get a refund in 2009.
  10. The credit for qualified 2009 purchases does not have to be repaid, as long as the home remains your main residence for 36 months after the purchase date.
For more information on the first-time homebuyer credit, please contact our office.



 
 
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