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FIRST TIME HOME BUYER TAX CREDIT
Here is a simple explanation of the First-Time Home Buyer Tax Credit that is part of the just signed Stimulus Plan.
Essentially, first-time home buyers within certain income limits who purchase a home in 2009 before December 1, 2009 will receive a tax credit of up to $8,000.
· To qualify as a first-time home buyer as defined in the programs, the purchaser (and the purchaser’s spouse) may not have owned a home in the three years prior to the purchase date of the home. Single family homes qualify for the program. The home must be the primary residence.
· The tax credit is subject to adjusted gross income limitations as follows: full credit for AGI less than $75,000 if single or less than $150,000 if married filing jointly; phased out for AGI up to $95,000 single/ $170,000 joint.
· The amount for the credit is the lesser of 10% of the home purchase price or $8,000.The program is similar to the $7,500 tax credit which applied to home purchases made in 2008 after April 9. Some differences are noted below:
· While a purchaser still owns the home, the $7,500 credit must be repaid in equal payments over a period of 15 years, starting with the 2010 tax filing.
· Upon sale of the home, any portion of the $7,500 credit not yet repaid is due in full.
· The $7,500 credit was not available to any purchaser utilizing state/local revenue bond money to help finance the home purchase. There is no such restriction on the $8,000 credit.
· Under both the $7,500 and the $8,000 programs, the credit will be claimed on the purchaser's income taxes. Any amount in excess of taxes owed will be refunded to the purchaser.
Essentially, first-time home buyers within certain income limits who purchase a home in 2009 before December 1, 2009 will receive a tax credit of up to $8,000.
· To qualify as a first-time home buyer as defined in the programs, the purchaser (and the purchaser’s spouse) may not have owned a home in the three years prior to the purchase date of the home. Single family homes qualify for the program. The home must be the primary residence.
· The tax credit is subject to adjusted gross income limitations as follows: full credit for AGI less than $75,000 if single or less than $150,000 if married filing jointly; phased out for AGI up to $95,000 single/ $170,000 joint.
· The amount for the credit is the lesser of 10% of the home purchase price or $8,000.The program is similar to the $7,500 tax credit which applied to home purchases made in 2008 after April 9. Some differences are noted below:
· While a purchaser still owns the home, the $7,500 credit must be repaid in equal payments over a period of 15 years, starting with the 2010 tax filing.
· Upon sale of the home, any portion of the $7,500 credit not yet repaid is due in full.
· The $7,500 credit was not available to any purchaser utilizing state/local revenue bond money to help finance the home purchase. There is no such restriction on the $8,000 credit.
· Under both the $7,500 and the $8,000 programs, the credit will be claimed on the purchaser's income taxes. Any amount in excess of taxes owed will be refunded to the purchaser.
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