TAKE ADVANTAGE OF THE HOMEBUYER TAX CREDIT
WHO IS ELIGIBLE
~First-time homebuyers who have not owned a principal residence in the last three years may be eligible for up to an $8,000 tax credit.
~Existing homeowners who have resided in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat-buyer”) may be eligible for up to a $6,500 tax credit.
~All U.S. citizens who file taxes are eligible to participate in the program.
Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat-buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
~For married couples filing a joint return, the combined income limit is $225,000.
~Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.
~The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.
~Homes must be purchased after November 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.
TYPES OF HOMES THAT QUALIFY
~All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.
TAX CREDIT IS REFUNDABLE
~A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.
~A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).
~A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat-buyer tax credit).
~All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.
The tax credit is a true credit. It does not have to be repaid unless the homeowner sells or stops using the home as their principal residence within three years after the purchase.
For additional details or questions call 260-740-1248. Information provided by Ed Neufer of RE/MAX Result.