The original first-time home buyer stimulus was supposed to have expired on November 30, 2009, but a November 9, 2009 law extended the popular first-time homebuyer credit of up to $8,000, and it created a new credit of as much as $6,500 for people who are long-time homeowners who decide to purchase a new principal home.
The new deadline for first-time homebuyers is now April 30, 2010, which means that you must have entered into a binding contract by that date, and that you must have closed on the home by June 30, 2010. If your purchase is being done at this time, the ceiling to qualify is now $125,000, which means it went up considerable from the $75,000 ceiling in 2009; this is in adjusted gross income for single filers. For married couples filing jointly, the adjusted gross income went from $150,000 to $225,000.
To be able to take advantage of this stimulus, a first time homebuyer is defined as someone who has not owned a principal residence for three years prior to buying a house. In this instance, the date of purchase is considered the day when title was actually transferred. This means that if you have owned a vacation home but not a main home in the past three years, you are still eligible for the credit.
Unlike an earlier $7,500 tax credit which was made available to home buyers, this one does not have to be paid back, as long as you own the home for at least three years. If you decide to sell the home before the three year limit, you will have to return the tax credit to the government. There are some exemptions considered where there are cases of death or divorce.
Something that must also be considered where taxes are concerned is the fact that the tax credit is refundable. What this means to you is that if you are a qualified buyer, you can take advantage of the tax credit, even if you do not have much tax liability.
If you are a long-time homeowner, the credit is available if you have owned your principal residence for more than five consecutive years in the eight years prior to the purchase. You must enter into a binding contract on or before April 30, 2010, and you must close on the home by June 30, 2010.
If you are in the military or a federal employee, you may get an extra year to qualify for the tax credit, but you must be serving outside the country in order to qualify. If this is the case, then you must enter into a binding contract on or before April 30, 2011. Entering into a binding contract means that you have signed a contract to purchase a principal residence.
When you can file for your homebuyer credit would depend entirely upon when you purchased the home. If you bought the home during 2009, then you may claim the credit when you file in 2010 for your 2009 taxes. If you purchased the home before November 6, 2009, you have the option to amend your 2008 return. It would be best for you to consult your tax expert to make sure that you make a proper filing for your tax credit.
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