Monday, December 7, 2009

Homebuyer Credit Expanded and Extended


By Karen Saley, Extension Specialist
Now may be a great time to purchase that new home. The $8,000 tax credit that was to expire at the end of December has been extended through April 2010. Here are some of the old and new requirements.

The rules that remain the same:

  • Applies only to homes used as your principal residence.
  • Reduces your tax bill or increases your refund, dollar for dollar.
  • Is fully refundable, meaning the credit will be paid out even if you owe no tax or the credit is more than the tax owed.
The new rules:
  • Under the new law, you must buy, or enter into a binding contract to buy, a home that will be your principal residence on or before April 30, 2010 and close on the home by June 30, 2010.
  • You will have the option of claiming the credit on either your 2009 or 2010 return.
  • Homeowners who buy a replacement home that will be the principal residence may also claim a homebuyer credit of up to $6,500. You must have lived in the same home for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.
  • The new law raises the income limits for people who purchase homes after Nov. 6.
    - The full credit will be available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
    - Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit.
    - Those with higher incomes do not qualify.
For more information click on the link below.,,id=204671,00.html


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