Fridrich & Clark Realty, LLC

There are exciting new provisions to the Extended and Expanded Home Buyer Tax Credit!

• Eligibility an for up to $8,000 first-time homebuyer tax credit has been extended until April 30, 2010.  As before, a first-time homebuyer is defined as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
• A very important new provision is that the expanded program now offers a credit of up to $6,500 to existing homeowners who have lived in their current home for at least five years and are purchasing a home to be their new principal residence.
• Income limits have increased from the privious credit:
  • Homebuyers who file as single or head-of-household taxpayers can claim the full applicable ($8,000 or $6,500) credit if their modified adjusted gross income is less than $125,000.
  • For married couples filing a joint return, the combined modified adjusted gross income limit is $225,000.
  • Partial credit is available for single or head-of-household taxpayers whose income is between $125,000 and $145,000 and for married couples earning $225,000 to $245,000.
  • The credit is not available for single taxpayers earning more than $145,000 or to married couples filing jointly whose income exceeds $245,000.
• The eligibility period for the tax credit is for homes purchased after November 6, 2009, and before May 1, 2010.  Home purchases subject to a binding sales contract signed by April 30, 2010 will qualify for the tax credit if the closing occurs prior to July 1, 2010.
• All homes with a purchase price of less than $800,000 qualify, including single family, condominiums, and townhomes, provided the home will be used as the buyer's principal residence.
• This is a true credit -- there is no repayment provision unless the homeowner sells or stops using the home as their principal residence within three years after the purchase.
• If the amount of income taxes you owe is less than the credit amount for which you qualify, the government will send you a check for the difference.
•   The credit can be taken on the 2009 or 2010 income tax return regardless of which year the home is purchased.

Further information can be found at the Federal Housing Tax Credit website.

It is important to consult a tax professional in order to obtain specific guidance on tax laws, including those pertaining to the Home Buyer Tax Credits.