The first-time home buyer tax credit, which Congress in February increased to $8,000 from $7,500, eliminating the repayment requirement, is an incentive you'd expect consumers to be clamoring over. But many buyers who are prime candidates for the credit aren't even aware of it. President Obama signed the economic stimulus package in Denver, CO which includes a gift for first time homebuyers - $8,000 (or 10% of the home's value, whichever is less) on their 2008 or 2009 taxes.
Here are the details:
REFUNDABLE: The credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of withholding they paid during the year- was less than that amount.
PURCHASE DATE: To qualify for the credit, the purchase must be made between January 1, 2009 and November 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house as their primary residence for at least 3 years, or they will be obligated to pay back the credit.
PAPERWORK: Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
INCOME RESTRICTIONS: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
THIS IS A TRUE TAX CREDIT: For example ifyour taxes are $10,000 you would only have to pay $2,000, and if your taxes were only $6,000 you would receive a $2,000 tax rebate.
*** Breaking News*** - On May 12, 2009, the secretary of the US Department of Housing and Urban Development said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a downpayment. There is no doubt that this is a great benefit to home buyers. And don't forget... the tax credit is set to expire November 30th.
This information is deemed accurate but not guaranteed, before you act based on this information be sure to consult your own tax preparer.