How it Works:

Any first-time home buyer who purchases a home between January 1, 2009 and November 30 , 2009 may be eligible for a tax credit of $8,000 or 10% of the purchase price, whichever is lower. This is considered a TAX CREDIT, not a TAX DEDUCTION

Tax Credit vs. Tax Deduction:

Last year you may recall part of the Bush Administration stimulus package included a $7,500 tax deduction. The credit REPLACES the deduction. The difference is that the deduction had to be re-payed, interest free, over 15 years. The credit MAY not need to be repaid, but I’ll get to that in a moment.

Eligibility:

In order to qualify, here are the criteria:

1. You must be a first-time home buyer.
2. You must make less that $75,000 on your tax returns, or less that $150,000 on a married joint filing.
3. The credit is for 10% of the purchase price, UP TO $8,000.
4. You cannot buy the home from a close relative. (sibling, parent, grandparent, spouse, etc.)
5. The home MUST be your primary residence for the first year you own it.
6. You MAY NOT resell the home for 3 years. If you do, you are required to re-pay the credit.
7. If you are married, BOTH SPOUSES must be considered first-time home buyers.
8. If you are a non-resident alien, you may NOT qualify.
9. The purchase date must be between January 1, 2009 and November 30 , 2009.

When Can You Claim The Credit?

The $8,000 tax credit can be claimed for your 2008 tax year (filed by April 15th 2009), 2008 amended return or 2009 tax year.

Sources:

HR 1, American Recovery and Reinvestment Act

HR 3221: Housing Economic and Recovery Act of 2008

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000 – office
301-653-8116 – cell

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