Homebuyer Tax Credit Extended & Expanded

First-Time Homebuyer Tax Credit Extended through April 2010

Eligible first-time homebuyers who purchase by April 30, 2010, can qualify for a tax-credit of 10% of a home’s sale price, up to $8,000 for single and joint filers and $4,000 for married individuals filing separately. To qualify, buyers or their spouses may not have owned a residence during the three years prior to the purchase.

New: $6,500 Tax Credit for Current Homeowners through April 2010

Eligible current homeowners purchasing a home between Nov. 7, 2009, and April 30, 2010, may qualify for a tax credit up to $6,500. To qualify, homeowners must have owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date.

Dollar-for-Dollar Reduction

These tax credits are straight, dollar-for-dollar reduction of the buyers’ tax bills and will be paid out to eligible taxpayers, even if they owe no tax, or the credit is more than the tax that they owe.

Eligible Properties

Tax credits may be applied to any home that will be used as a primary residence, including single-family homes, condos and townhomes. The purchase price may not exceed $800,000, and the home cannot be purchased from other family members (parents, grandparents, children, grandchildren, etc.) or a spouse or a spouse’s family members.

Expanded Income Limits

Effective Nov. 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum tax credit. The amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits.

Buyers with an MAGI of more than $145,000 (single) or $245,000 (married) are not eligible. First-time homebuyers who purchased between Jan. 1, 2009, and Nov. 6, 2009, are subject to income limits in place prior to the extension of the tax credit. For married couples filing a joint return, that was an adusted gross income (AGI) of $150,000 or less; and all others, an adjusted gross income (AGI) of $75,000 or less.

Deadline
Homebuyers must have a written, binding contract to purchase in effect by April 30, 2010, and must close by June 30, 2010.


NOTE: This is only a brief summary of the First-Time Homebuyer and Current Homebuyer Tax Credit, intended for informational purposes only. This summary does not constitute tax, accounting or legal advice of any kind. Because other terms and conditions may apply to any individual taxpayer, individuals should consult their independent tax advisor to ascertain whether they are eligible for this tax credit. Although this summary is generally accurate, we do not warrant the accuracy, reliability or completeness of this summary. More information regarding the tax credit is available from the Internal Revenue Service at www.irs.gov.