Homebuyer Tax Credit Forms Now Available

The Treasury Department and the IRS moved swiftly to make available the Tax Credit portion of the American Recovery and Reinvestment Act of 2009, aka: the Stimulus Act.

The tax credit is available to homebuyers who purchase a home before December 1 of 2009. Homebuyers can claim the credit either on their 2009 tax returns or immediately on the 2008 tax returns due in April.

The tax credit represents 10% of the purchase price of a home up to a maximum credit of $8,000 or $4,000 for married taxpayers filing separate returns. The $7,500 credit that was available under earlier legislation was actually a 15 year loan. The new tax credit does not have to be repaid by the homeowner under ordinary circumstances.

The credit does have to be repaid if the homeowner sells the home in less than 36 months or if the home is no longer the homeowners primary residence during the 36 months period of time.

Interestingly, a 1st time homebuyer for this tax credit is defined as a buyer that has not owned a home for the past 36 months ending on the date of purchase.

The credit is available to taxpayers with adjusted gross incomes up to $75,000 or $150,000 for married taxpayers filing jointly. Above those income limits the credit is gradually phased out.

Homeowners who purchased a house between April 8 and December 31, 2008 are not eligible for the new credit. They are covered by the old rule and can claim the $7,500 repayable credit.

FORMS AND INSTRUCTIONS FOR CLAIMING THE CREDIT ON 2008 TAX RETURNS ARE AVAILABLE AT www.irs.gov
Form #5404

If you have any questions or comments, please contact: marcia@minocquamortgage.com or www.minocquamortgage.com