FIRST TIME HOME BUYER TAX CREDIT FOR 2009
$8,000 Home Buyer Tax Credit at a Glance
The tax credit is for first-time home buyers only.
The tax credit does not have to be repaid.
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
The Law’s Other Provisions
In addition to the tax credit, the American Recovery and Reinvestment Act of 2009 has several other provisions that will benefit home buyers and the housing market. The legislation:
Will help home buyers in high-cost markets by extending the FHA, Fannie Mae and Freddie Mac loan limit of $729,750 through the end of 2009.
Allows state housing finance agencies to help buyers at closing by advancing the credit as a loan using proceeds from tax-exempt bonds.
Extends the tax code section 25C credit for energy-efficient home improvements through the end of 2010; increases the credit rate from 10 percent to 30 percent; raises the lifetime cap from $500 to $1,500; expands the list of eligible improvements.
For 2008 operations, expands the net operating loss carryback period from two years to five years for small businesses (businesses with average gross receipts of no more than $15 million over the previous three years).
Temporarily allows exchange of Low-Income Housing Tax Credit allocating authority for tax-exempt grants and appropriates $2 billion in HOME funding for affordable housing projects.
Provides a "patch" for the Alternative Minimum Tax for tax year 2009.
Increases bonus depreciation and section 179 small business expensing for business investment in 2009.
Increases New Markets Tax Credit allocating authority for 2008 and 2009.
Delays for one year—from 2011 to 2012—the start of the three percent government contractor withholding requirement.
Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
In some circumstances, you may be able to treat the purchase as having been bought on 12/31/08 and take the credit on your 2008 tax return!
For more information go to:
http://www.federalhousingtaxcredit.com/2009
