Federal Housing Tax Credit FAQ | First-Time Home Buyer Tax Credit

Posted by Jace Stolfo on Friday, January 22nd, 2010 at 9:07pm.

Here's the top frequently asked questions regarding the first-time home buyer tax credit:

When is the deadline?

The first-time home buyer tax credit is currently set to expire on April 30, 2010.  However, you may still be eligible for sales closing by June 30, 2010 provided there's a binding sales contract in force on or before April 30, 2010.

Who's eligible for the $8,000 tax credit?

First-time home buyer's purchasing a new or existing home between January 1, 2009 and on or before April 30, 2010. The IRS defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.

Who's eligible for the $6500 tax credit?

A person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers,  both spouses must meet this requirement. The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.  Homes purchased over $800,000 are not eligible for tax credit. The property purchased must be a principle residence.

Is a tax credit the same as a deduction?

No, a tax credit is a dollar for dollar reduction in tax liability.

Is there an income limit?

Yes, $125,000 for individuals and $225,000 for married couples filing jointly for all sales occurring after Nov. 6, 2009.

Get more tax credit details from the IRS or www.federalhousingtaxcredit.com

Disclaimer: Information deemed reliable but not guaranteed.  To determine your actual or potential eligibility please contact your CPA.

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