The Tax Credit Landslide: Homebuyer Credit Extended through June 2010

Date:November 6, 2009 | Author:Ken Perlmutter | Category:8000 tax credit

Well, the results are in! 403-12, to be exact…yesterday, the House of Representatives voted to approve an extension of the historic first-time homebuyer tax credit through Summer 2010. According to the National Association of Home Builders (NAHB), the credit is expected to generate 180,000 additional home sales. Here’s a rundown of the most recent developments:

The deadline has been extended
Many news outlets are referring to the credit as being extended through May, others are referencing June as the deadline. Specifically: to be eligible, binding purchase agreements must be signed by April 30, 2010 and deals must be closed by June 30, 2010.

Not just for first-timers anymore
Existing homeowners (or “repeat buyers”) who have lived in their principal homes for 5 consecutive years (out of the past 8 years) and are purchasing a new principal residence may be now eligible for a credit of up to $6,500.

You can make a higher salary
Buyers filing as single or head-of-household taxpayers can claim the full credit if their modified adjusted gross income is less than $125,000. Married couples filing joint returns are eligible if their combined income is less than $225,000.  Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

More homes will qualify
All homes with a purchase price of less than $800,000 qualify. Vacation home and rental property purchases are not eligible.

The credit can be a part of your refund
If the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.  For example: a first-time buyer qualifying for the full $8,000 credit who owes $5,000 in federal income taxes would receive a $3,000 refund. Qualified home buyers can take the tax credit on their 2009 or 2010 income tax return.

You can keep the cash
The tax credit does not have to be repaid unless the owner sells, or stops using the home as their principal residence, within three years after the date of purchase.

Stay current
Keep up-to-date with tax credit developments: follow the credit on Twitter (@FTHBtaxcredit) and on Facebook (become a fan of $8,000 Home Buyer Tax Credit).