Who is Eligible?
• $6,500 tax credit is available for current homeowners purchasing their next primary residence between November 6, 2009 to April 30, 2010.
• The law defines a tax credit qualified move-up buyer as a person who has owned and resided in the same home for at least 5 consecutive years of the 8 years prior to the purchase date.
• All U.S. citizens who file taxes are eligible to participate in the program. Payback Provisions • The tax credit is a true credit. It does not have to be repaid.
• The only repayment requirement is if the home owner sold the home within three years after the purchase. Income Limits • Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $125,000.
• For married couples filing a joint return, the income limit doubles to $225,000.
• Single or head-of-household taxpayers who earn more than $125,000 are eligible to receive a partial home buyer tax credit.
• Married couples who earn more than $225,000 are eligible to receive a partial home buyer tax credit. Effective Dates for the Tax Credit • Move-up/repeat home buyers would receive a $6,500 tax credit for the purchase of any home on or after November 6, 2009 and before April 30, 2010. To qualify, you must be in escrow no later than April 30th and close before June 30, 2010. Tax Credit is Refundable • A refundable credit means that if you pay less than $6,500 in federal income taxes, then the government will write you a check for the difference.
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $1,500 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to $7,500 ($1,000 plus $6,500 from the home buyer tax credit).
• Buyers can take the tax credit on their 2009 income tax return.
Types of Homes that Qualify for the Tax Credit • All homes $800,000 or less, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a principal residence in the three years prior to the purchase. This also includes newly-constructed homes. |