Following are key points that prospective
home buyers should be aware of when
considering a home purchase under the tax
credit program.
•A
tax credit of up to $8,000 is available for
first-time home buyers purchasing on or
after January 1, 2009 and on or before April
30, 2010. In cases where a binding sales
contract is signed by April 30, 2010, a home
purchase completed by June 30, 2010 will
qualify.
•A tax credit of up to $6,500 is available
for repeat home buyers who have owned a home
for five consecutive years out of the prior
eight years. The repeat home buyer tax
credit applies to houses sold after November
6, 2009 and on or before April 30, 2010. In
cases where a binding sales contract is
signed by April 30, 2010, a home purchase
completed by June 30, 2010 will qualify.
•Income limits of $125,000 for individuals
and $225,000 for married couples filing
jointly apply to all sales occurring after
Nov. 6, 2009.
•The income limits for sales occurring on or
after January 1, 2009 and on or before
November 6, 2009 are $75,000 for individual
taxpayers and $150,000 for married couples
filing jointly.
•Homes priced above $800,000 are not
eligible for either the first-time home
buyer tax credit or the repeat home buyer
tax credit.
•Expanded tax credit benefits apply to
members of the military, the foreign service
and the intelligence community.
•Home purchases in 2010 may be claimed on an
amended 2009 income tax return.
•Persons who are claimed as dependents by a
taxpayer or who are under age 18 do not
qualify for a tax credit.
•Home purchases from relatives of the
taxpayer or the taxpayer’s spouse do not
qualify for the tax credit. The IRS defines
relatives as ancestors (parent, grandparent,
etc.), lineal descendants (child,
grandchildren, etc.) and spouses.
•Married couples are not eligible to claim
the first-time home buyer tax credit if
either spouse has previously owned a home.
They may, however, qualify for the repeat
home buyer tax credit.
•Neither the first-time home buyer tax
credit nor the repeat home buyer tax credit
have to be repaid unless the home is sold or
ceases to be used as the buyer’s principal
residence within three years after the
initial purchase.
•Taxpayers must submit a copy of the HUD-1
settlement statement and IRS Form 5405 to
claim either the first-time home buyer tax
credit or the repeat home buyer tax credit.
