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Kingwood TX Federal Tax Credit Extension | First Time Home Purchase | Homebuyer Qualifications  The December 31, 2009 deadline for the Federal Homebuyers Tax Credit will be extended to April 30, 2010. Now is your chance to take advantage of the Tax Credit you could receive for buying your home on or before April 30, 2010.
President Obama signed the legislation HR 3548 on November 6th, 2009. Here is what you need to know about the changes ... 1. Although the extension will be moved to April 30, 2010 it is not an absolute deadline. As long as you have a signed contract on or before April 30, 2010 you will still be eligible providing you closed the transaction within the following 60 days. 2. The income levels have been shifted to include new limits of $125,000 for single filers and $225,000 for couples filing jointly. 3. The new relief will now include those people that have previously purchased and are living in a home within the last 5 years. They are called Move-Up Buyers or Step Up Buyers and will be allowed a tax credit of up to $6,500. 4. Anyone taking the credit on a 2010 purchase can claim it on his or her 2009 tax return. 5. The new law extends a similar credit until May, 2011 for members of the uniformed services whose duty takes them overseas. 6. Lastly, the Federal Government will be adding steps to prevent fraud. There will be stricter guidelines and added documentation will be needed to prove you actually bought a home and are age appropriate. Meaning you will have to be 18 years or older to purchase a home. Below is the original Tax Credit from February, 2009... 1. The Tax Credit is for home buyers (either spouse if filing jointly) who have NOT owned a principle residence during the three-year period prior to the purchase. Ownership of vacation property or rental property does not disqualify home buyers from this program. 2. The maximum credit is $8,000 or 10% of the home purchase, whichever is less. 3. To qualify for the full tax credit, married couples' modified adjusted gross income (MAGI) should be under $150,000 and single filers' MAGI should be less than $75,000. Partial tax credits may be available for married couples with MAGI incomes of over $150,000 but under $170,000 and single filers with incomes over $75,000 but under $95,000. If married couples who qualify for the first-time tax credit file separately, they would both claim 5% of the home purchase or $4,000 each (whichever is less) on their tax returns. 4. Home buyers who qualify for this program, but who do not intend to purchase a home till the end of 2009, may elect to alter their tax withholdings (up to the amount of the of the tax credit) in order to save up money for a down payment. However, if the purchase of the home does not occur, the taxes must be repaid to the IRS. 5. There is no recapture or repayment clause IF the home is owned for at least 36 months. 6. The effective date of purchase for new construction (even if buyer owns title to the lot) is the date the owner first occupies the house. So even if construction began in 2008, as long as the home and buyers qualify for the tax credit, they will be eligible if they take possession any time during 2009. However, new construction bought from the builder is only eligible if the settlement date (closing) takes place between January 1, 2009 and December 31, 2009. 7. The law allows taxpayers to elect to treat qualified 2009 purchases as a 2008 purchase so that they can receive the tax credit on their 2008 tax returns. 8. The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes. |