News Archive

New law contains good news for homebuyers

Filed Under: Your Finances on December 04, 2009

The “Worker, Homeownership, and Business Assistance Act
of 2009.” which was signed into law on November 6, 2009,
made significant changes to the homebuyer tax credit.
Here are the details.

CREDIT EXTENDED. The new law makes the credit available
through April 30, 2010. If your transaction is incomplete
as of April 30, you’ll still be able to claim this tax
break on your 2009 or 2010 return, provided you have a
binding written contract and close by June 30, 2010.

In most cases, the amount of the credit remains the
same - 10% of the price of your new home, up to a
maximum of $8,000 - and it’s still refundable. In
addition, recapture requirements are unchanged. That
means you won’t have to pay the money back as long as
you live in your new home three years.

PURCHASE PRICE RESTRICTION. For homes bought after
November 6, 2009, the credit is available only when the
total purchase price is less than $800,000.

RELAXED ELIGIBILITY REQUIREMENTS. You’re now a
”.irst-time homebuye.” if you used the same residence
as your main home for five consecutive years of the
eight years prior to buying the new house. However, if
you qualify under this rule, the credit is limited to
a maximum of $6,500.

INCREASED INCOME PHASEOUTS. If you purchase or close on
your new home between November 6, 2009, and June 30,
2010, the credit begins to shrink when your modified
adjusted gross income reaches $225,000 if you’re married
filing jointly. The threshold is $125,000 if you’re
single.

MINIMUM AGE AND DEPENDENCY STATUS. You or your spouse
must be at least 18 years old and not claimed as a
dependent on anyone else’s return.

UNRELATED SELLER. The person you purchase the house
from cannot be a relative.

RETURN ATTACHMENTS. You’ll have to include a copy of
the closing statement with your tax return.

Please contact us if you would like more information
about the homebuyer’s credit.

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