Federal Tax Credit Program
$8,000 for First-Time Homebuyers
$6,500 for Existing Homeowners
What you Should know about these
tax credit programs
Congress and the President have extended the $8,000 tax credit for first-time buyers and expanded the program to $6,500 for existing homeowners. You now have until April 30th, 2010 to sign a contract and qualify. AND, starting November 7th, many existing home owners also qualify.
- The temporary credit is only available for home purchases that go to contract before May, 1st, 2010, and that close before July 1st, 2010.
- It's equal to 10% of the cost of the home, up to a maximum credit of $8,000. (for example, a home purchase for $80,000 or more would qualify for the full $8,000 credit, while a $70,000 would qualify you for on 10%, or $7,000.) But homes that cost more than $800,000 are ineligible for any tax credit.
- This is a tax credit, which is even better than a tax deduction; it's subtracted directly from you tax liability. If the credit is more that your total tax liability that year, you will receive a refund for the balance. (Note that a married buyer filing separately is only eligible for up to a $4,000 credit.)
- Eligible properties include anything that will be used as a principal single-family residence, including condos and townhouses.
- First-Time homebuyers can take advantage of the full $8,000 tax credit. A first-time buyer is defined as an individual who has not owned a home the past three years. For married joint filers, both must meet the first-time buyers criteria to take the credit on a joint return.
- Existing homeowners who have lived in their current home for five consecutive years out of the past eight are eligible for up to a $6,500 tax credit when they purchase a new home.
- There are income guidelines on the credit. Individuals with a adjusted gross income up to $125,000 (or 225,000 if filing jointly) are eligible for the full tax credit. The credit is phased down for those earning more and ins not available for those with an income above $145,000 (or $245,000 if filing Jointly.)
For more information contact Miller & Rhoads at 804.249.7670
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