FIRST-TIME HOMEBUYER TAX CREDIT
2nd Modification of the American Recovery and Reinvestment Act effective November 6, 2009
|
Jan 1 – Nov 30, 2009 CREDIT |
Dec 1, 2009 – Apr 30, 2010** CREDIT |
| Amount of Credit |
Lesser of 10 percent of cost of home or $8000 ($4000 married filing separate) |
Lesser of 10 percent of cost of home or $8000 ($4000 married filing separate) |
| Eligible Property |
Any single family residence (including condos, co-ops, townhouses) used as a principal residence. |
No change
All principal residences eligible.
|
Refundable |
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. |
No change
Purchasers will continue to receive refund for unused amount when tax return is filed.
|
Income Limit |
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000). |
Yes. Full amount of credit available for individuals with adjusted gross income of no more than $125,000 ($225,000 on a joint return). Phases out above those caps ($125,000 and $225,000). * |
| First-time Homebuyer Only |
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase. |
No change as to 1st time homebuyers*
Current Homeowner (PR 5 of past 8 yrs) eligible for up to a $6500 credit ($3250 married filing separately)
|
Repayment |
No repayment for purchases on or after January 1, 2009 and before December 1, 2009 |
No repayment for purchases on or after December 1, 2009 and before July 1, 2010 (must have contract before April 30, 2010) |
Recapture |
If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. |
No change
If home is sold within three years of purchase, entire amount of credit is recaptured on sale.
|
| DC Tax Credit |
Homeowners are NOT eligible for both credits. |
No Change |
| Termination |
December 1, 2009
(But note program changes for 2009)
|
April 30, 2010 to contract
July 1, 2010 to close
|
Effective Date |
All revisions are effective as of January 1, 2009 |
All revisions (except as indicated) effective as of December 1, 2009 |
| Limitation on
Cost of Home
|
No limit |
$800,000 adjusted basis effective November 6, 2009 |
| Purchase by Dependent |
No Provision |
Ineligible effective November 6, 2009 |
| Anti-Fraud Rule |
None |
Must attach documentation of purchase to tax return |
|
* Note - DC First-Time Homebuyer Credit Eligibility:
1. Buy a home in the District of Columbia (one must not have owned a home in D.C. within one year of the qualified purchase);
2. Occupy the property as their principal residence; and
3. Meet the following income Requirements:
Single Filers – with up to $70,000 in modified Adjusted Gross Income (AGI) receive the benefit of the entire $5,000 credit. People with a modified AGI of between $70,000 and $90,000 are entitled to a partial credit. For those with a modified AGI between $70,000 and $90,000 the credit is reduced by $250 for every one thousand dollars over $70,000.
Joint Filers - with up to $110,000 in modified AGI receive the benefit of the entire $5,000 credit. Couples with a modified AGI of between $110,000 and $130,000 are entitled to a partial credit. For those with a modified AGI between $110,000 and $130,000 the credit is reduced by $250 for every one thousand dollars over $110,000.
** Note - Parties have up until July 1, 2010 to close on contract ratified before April 30, 2010
