First Time Home Buyer Tax Credit
The first-time home buyer tax credit is a program that was put into effect by the federal government that allows first-time homebuyers to receive a tax credit up to $8000 if you meet the qualifying income levels and have never owned a home in the past.
This program is at the end in December of 2009 but has been extended to the end of January 2010. The federal government and especially the IRS are encouraging people to take advantage of this credit and also to be aware of fraud and scams that have been redesigned to help people file false claims.
First-time home buyer tax credit can only be claimed on your tax return after your home purchase has been completed. Below you’ll find some details about the first-time home buyer tax credit that can help you determine whether or not you’re eligible.
Program Details
- First-time home buyer tax credit is 10% of the purchase price of your home and maxes out at $8000 if you’re single or married and filing jointly with your spouse. If you’re married filing separate returns the limit is actually only $4000 but, this credit has been made available to most homes that cost more than $80,000.
- Depending on whether or not you owe or are expecting a tax refund, this credit will be used in its entirety. This is unlike a lot of other tax credits in that home buyer credit is fully refundable. This essentially makes it so that you receive the tax credit whether or not you owe taxes.
- The tax credit only applies to homes purchased in the United States.
- If you actually build your home, you can still obtain a first-time home buyer tax credit which you must do so before the deadlines when the tax credit expires.
- If your income is above $170,000, you will not qualify for this tax credit. This credit begins phasing out at $150,000 of total income.
- If only purchase or build is sold or is no longer your primary residence you must actually repay the first-time home buyer transcript back within three years.
You May Not Apply for This Tax Credit If…
- Your income is higher than $170,000 for joint filers and about 95,000 for single filers
- If you purchase your home for a close relative including a parent grandparent or spouse
- I f you owned another home that was used as a primary residence within the past three years. This applies to both people if you are a married couple filing a joint return.
- If you are a non-US citizen or a nonresident alien.
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