There are still a lot of people with questions about the $8000 first time Home Buyer Tax Credit which is a part of the stimulus package.
Who is a first time Home Buyer
Anyone who has never purchased a home or has not been part owner of a home in the past 3 years is considered a “First Time Home Buyer“.
What is the window for purchasing a home
The window for the purchase of a home is January 1, 2009 – November 30, 2009
This tax credit is like a refund
The tax credit is up to $8,000. You don’t have to have a large income to use this credit. It is the type of credit that works like a refund. The home you purchase has to be over $80,000 to receive the entire amount. If you owe the government taxes that weren’t taken out of your paycheck those taxes will have to be paid or deducted from the $8,000 credit.
When can I get the Tax Credit
You can get the tax credit for your 2008 or 2009 tax return.
If you already filed Your 2008 return can you still get the tax credit this year. You can file an amended return using Form 1040X. If you purchased a home before April 15, 2009 and you haven’t filed your taxes you can apply for the credit on this years tax return and file your taxes as usual.
If you plan to buy a home later this year and you haven’t filed yet you can file an extension as long as your taxes for 2008 are filed by Oct. 15.
(I am not a tax consultant and don’t play one on TV either. This post is for general information purposes only.)
It applies for homes purchased between January 1 and November 30, 2009
Below is a table provided by the National Association of Realtor showing a comparison between the $7500 Tax credit from 2008 and this $8000 credit in the stimulus bill. You can download the original table here.
FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Bolded
|FEATURE||CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008||REVISED CREDIT â€“ EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009|
|Amount of Credit||Lesser of 10 percent of cost of home or $7500||Maximum credit amount increased to $8000|
|Eligible Property||Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.||No change
All principal residences eligible.
|Refundable||Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.||No change
Purchasers will continue to receive refund for unused amount when tax return is filed.
|Income Limit||Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).||No change
Same income limits continue to apply.
|First-time Homebuyer Only||Yes. Purchaser (and purchaserâ€™s spouse) may not have owned a principal residence in 3 years previous to purchase.||No change
Still available for first-time purchasers only. Three-year rule continues to apply.
|Revenue Bond Financing||No credit allowed if home financed with state/local bond funding.||Purchasers who utilize revenue bond financing can use credit.|
|Repayment||Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.||No repayment for purchases on or after January 1, 2009 and before December 1, 2009|
|Recapture||If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.||If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.|
|Termination||July 1, 2009
(But note program changes for 2009)
|December 1, 2009|
|Effective Date||Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year.||All revisions are effective as of January 1, 2009|
The window of opportunity is closing for the $8000 first time home buyer tax credit. All purchases must be made completed by November 30, 2009.
If there are questions not answered in this table below please feel free to contact us. We work with first time home buyers through this process in an on going basis. We will be glad to help you find a home in Tucson to which you can apply this tax credit.