Homebuyer Tax Credit (First Time) Part 1

I wanted to take the time to outline the new IRS regulations for the First Time Homebuyer Tax Credit.  First Time Homebuyers are people that have not owned a home in the past three years.

The time frames for the Worker, Homeownership and Business Assistance Act of 2009 are as follows: April 30, 2010, contract must be signed; June 30, 2010 for closings.

The IRS has also outlined other important features of the program:

• The credit is equal to 10 percent of the purchase price of the house, with a maximum of $8,000
• Member of the armed forces (including diplomatic and intelligence personnel) in service in foreign countries will receive an additional year to qualify.  The dates are April 30, 2011 for signed contracts and June 30, 2011 for closings.
• Anyone purchasing a home after November 6, 2009 (even those who had intended on meeting the old criteria for tax credit) must comply with the new rules.   1. The house can not cost more than $800,000.  2. No one under 18 can claim the credit, regardless of circumstance.  3. Those who are counted as dependents on another taxpayer’s federal filings are ineligible.
• The expanded income amounts for purchasers after November 6th range from $125,000 in “adjusted gross income” for single taxpayers to $225,000 for those filing jointly.  Singles with income between $125,000 and $145,000 may be eligible fore phased-down credit amounts, as are joint filers with incomes from $225,000 to $245,000.  Anyone above these amounts can not qualify for the credit.  These amounts are much higher than the previous allowed income amounts prior to the change.

More to come . . . feel free to contact me in the meantime with any questions.