$ 8000.00 Tax Credit Information

Here is how the credit works:

If you’re in a market for your first home, or if you are looking to buy again after not owning for three years, Congress is giving you an added incentive to become a homeowner. If you qualify and purchase a home after January 1, 2009 and before December 1, 2009, you could receive up to the full $8,000 tax credit that you won’t have to repay. Any home purchased for $80,000 or more qualifies for the full $8,000 amount. If the house costs less than $80,000, the credit will be 10% of the cost.

There are some restrictions, so please read the below and the questions and answers to make sure you qualify.

Payback Provisions

• The tax credit is a true credit. It does not have to be repaid.
• The only repayment requirement is the homeowner sells the home within three years after the purchase.

Income Limits

• Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $75,000.
  
• For married couples filing a joint return, the income limit doubles to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
• Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
• The credit is not available for a single taxpayer who’s MAGI is greater than $95,000 and married couples with a MAGI that exceeds $170,000.

Effective Dates for the Tax Credit

• To qualify, you must actually close on the sale of the home on or after January 1, 2009 and before December 1, 2009.

Tax Credit is Refundable

• A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.
  
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit).
  
• Buyers can take the tax credit on their 2008 or 2009 income tax return.
  

Types of Homes that Qualify for the Tax Credit

• All homes, whether single-family, townhomes or condominium apartments, will qualify, provided that the home will be used as a principal residence and the buyer has not owned a principal residence in the prior three years. This also includes newly-constructed homes.