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$8000 Tax Credit for First Time Home Buyer

Who Can Get The $8000 Credit?

First-Time Home buyers only, which is defined by the Federal Government as anyone who has not owned a primary residence in the last three years. All buyers and co-signers must meet this requirement. The purchase must also be for a single family primary residence.

What Exactly Does The First Time Home Buyer Get?

A tax credit of $8000, to be used against your 2008 or 2009 tax return. A tax credit is is a refund of money you have paid in federal taxes (through withholdings or on your tax return). It's not a "tax deduction" which is not as valuable as a Tax Credit. Let's say you had $5,000 withheld from your paycheck this year, and your actual federal tax bill is $5500, meaning you would have to pay an additional tax of $500 on April 15th. With this Tax Credit you would instead get back $7500 ($8000-$500 you owe).

Are There Limits On Income?

An income limit of $75K for singles and $150K on a joint tax return applies. However a phase out does exist for higher income levels. If you sell the home within three years of purchase the entire $8000 will be recaptured at the time of the sale.

Where Can I find More Information?

The site with the best and most information is at this site: www.federalhousingtaxcredit.com/2009/faq.php Why? Part of the American Recovery and Reinvestment Act of 2009 to stimulate the housing market. This is a once in a life time opportunity for First Time Home Buyers. When? Your home purchase must close between January 1, 2009 and December 1, 2009. Closing is defined as the day you take title to the property. How? Once you have closed on your home purchase you can either amend your 2008 tax return (IRS form 5405) or wait and claim it on your 2009 tax return. If your total tax bill is less than $8000. you will receive a check for the difference. My clients have experienced a 60 day turn around on amended 2008 returns.

In November 2009 Congress extended this benefit to April 30, 2010. The property must be under contract by that date and the sale closed and funded 60 days after that date to qualify.

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