Extended Homebuyer Tax Credit (effective Nov. 7, 2009)
| Feature | Current Homeowner | 1st Time Homebuyer |
|---|---|---|
| To Qualify | Has occupied current home as principal residence for 5 consecutive years within the last 8 years, and decides to buy another home. (see note 1 below) | Has not owned a home in the past 3 years, and buys a home. (Married taxpayers are excluded if either spouse owned a home in the past 3 years) |
| Amount of Tax Credit | Credit is the smaller of: • $6,500 ($3,250 if married filing separately), or • 10% of the home purchase price | Credit is the smaller of: • $8,000 ($4,000 if married filing separately), or • 10% of the home purchase price |
| The following (below) applies to both Current Homeowners and First-time Buyers: | ||
| Effective Dates | • A written, binding contract must be in place by April 30 and close by June 30, 2010. | |
| Income Limit (see notes 2 & 3 below) | Full Credit Individuals: Income up to $125,000 Joint filers: Incomes up to $225,000 Partial Credit Individuals: Income of $125,000 - $145,000 Joint filers: Incomes of $225,000 - $245,000 * First-time buyers who purchased a home in 2009 and closed before Nov . 7, 2009 are subject to lower income limits | |
| Eligible Property | Single-family home that will be used as a principal residence. It can also be a condominium, cooperative apartment, or other type of residence. Vacation homes and rental properties are ineligible . You cannot buy a home from a related person, which includes a spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc.) and receive the tax credit. | |
| Purchase Price Limitation | Maximum of $800,000 or less. Current homeowners do not have to purchase a more expensive home to qualify for the tax credit. | |
| Which Tax Return Year | For help determining in which year to claim the credit (an amended 2008, 2009 or 2010 tax return), consult a qualified tax advisor. | |
| Recapture of Tax Credit | Buyer is not required to repay tax credit as long as he/she occupies the home for three years or more. However, if property is sold during the 3-year period, the amount of tax credit claime d by buyer will be recouped upon sale. Recapture is waived for military personnel relocating due to orders. | |
Notes:
| 1 | Current homeowners (repeat buyers) with a contract in place prior to Nov. 7, 2009 will still qualify for the |
| tax credit as long as the contract is closed between Nov. 7, 2009 and June 30, 2010. | |
| 2 | Income is defined as modified adjusted gross income [MAGI] on a person’s federal income tax return. |
| (for most people , MAGI will be the same as adjusted gross income [line 37] on their 1040 federal tax form. | |
| 3 | To calculate partial credit, consult a qualified tax advisor. |
| 4 | Home must be within the United States only. U.S. Territories are excluded. |
| 5 | The tax credit deadline is extended for one year after expiration date for any military personnel serving |
| outside the U.S. for at least 90 days from Jan. 1, 2009 through April 30, 2010. | |
| 6 – | The above information is merely intended to provide basic information about the housing tax credit. For |
| more specific questions regarding your situation, you are strongly encouraged to consult a qualified tax | |
| advisor, or go to the IRS web site at www.irs.gov. |
Provided as a government affairs service of the Cincinnati Area Board of REALTORS®.