We get a lot of questions about the home buyer tax credit for both new home buyers and move-up buyers. Here are the details:
- The Tax Credit will be $8,000 for First Time Homebuyers, and $6,500 for Move-Up Homebuyers.
- Move-Up buyers will be eligible as long as the home they are leaving has been their principal residence for five or more years.
- The Tax Credit will end on April 30, 2010. However, there is a binding contract rule that permits those with contracts as of April 30, 2010, to qualify for the Tax Credit as long as they close on the home before June 30, 2010.
- The income limits for both First Time Homebuyers and Move-Up Homebuyers are $125,000 for an individual tax return, and $225,000 for a joint tax return.
- The cost of the home cannot exceed $800,000 to be eligible.
- For home purchases made in 2010, taxpayers will be able to claim the Tax Credit on their 2009 income tax return.
- Homebuyers will not have to repay the Tax Credit provided the home remains their principal residence for thirty-six (36) months after the purchase.
- The amendment includes a military waiver provision stating that the recapture provision will not apply in the case of a member of the Armed Forces, Military Intelligence, or Foreign Service who is on qualified official extended duty. In addition, members of the military who have been deployed overseas for ninety (90) days or more in 2008 or 2009 have until April 30, 2011 to claim the Homebuyer Tax Credit.
- The amendment also includes anti-fraud language that provides math authority to the IRS for greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires that the taxpayer claiming the Tax Credit to be 18 or older and also requires a HUD-1 Settlement Statement to be attached when claiming the credit.