ERA Realty Center of El Dorado Hills, CA
| Daryl and Beverly Johnson "Always There For You" 916-941-3440 |
First-Time Home Buyer Tax Credit
| Information is provided as published by CAR, and is deemed accurate, but not guaranteed by Daryl and Bev. Interested parties are advised to seek advice from their tax advisor. |
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The 2008 tax credit program available to first time homebuyers was modified by the American Recovery & Reinvestment Act in 2009. Highlights of the new program are outlined below. For a limited time only, first time homebuyers can receive up to a $8,000 FREE tax credit on your Federal Income Tax or the credit may qualify as part of your down payment. Consult with your tax professional to see how this program affects you. |
A CONSUMER GUIDE TO THE FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT
As Modified in the American Recovery and Reinvestment Act February 2009
Feature First-time homebuyer Federal Income Tax Credit
Effective For purchases on or after January. 1, 2009 and before December 1, 2009.
Amount of Credit The amount of the homebuyer federal income tax credit is the lesser
of 10% of the cost of the home bought or $8,000.
Eligible Property Any single-family residence (including a condo, co-op, or townhouse)
may be an eligible property under the homebuyer income tax credit,
provided it will be used as the homebuyer’s principal residence.
Refundable This homebuyer income tax credit reduces income tax liability. The $8,000
tax credit is a clean refundable credit, unlike the one that was passed last
summer, which required a repayment. If you qualify as a first-time buyer
(i.e., haven't been a homeowner in the past 3 years), then you can claim
the $8,000 to reduce your tax burden. If the $8,000 is greater than the tax
you owe, then you will get a refund check for the difference. Example: you
owe $2,000 in taxes on April 15, 2010. But if you bought a home before the
stimulus expiration on Dec. 1, 2009, then you will get a tax refund check for
$6,000 from the IRS.*
Income Limit In order to be eligible for the homebuyer income tax credit in full, the homebuyer
can have an annual adjusted gross income of no more than $75,000 ($150,000
on a joint return). A homebuyer with an annual adjusted gross income above that
and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit.
First-time Buyer Only The homebuyer income tax credit is designed for first-time homebuyers, which
means the homebuyer (and/or the homebuyer’s spouse) can not have owned
a principal residence in the 3 years prior to purchase of the eligible property.
Revenue Bond Financing A homebuyer who utilizes revenue bond financing may be eligible for the
homebuyer income tax credit.
Repayment There is no repayment of the homebuyer income tax credit by the homebuyer.
Recapture However, if the eligible property is resold within three years of purchase, the
entire amount of homebuyer income tax credit is recaptured on the sale.
Effective Date The First-Time Homebuyer Federal Income Tax Credit is effective for
purchases on or after January 1, 2009 and before December 1, 2009. This
guide reflects a modification from the First-Time Homebuyer Federal Income
Tax Credit, which remains in effect for homes purchased by eligible
homebuyers between April 9, 2008 and Dec. 31, 2008.