Homebuyer tax credit extended & expanded
November 15, 2009 by Jennifer Chait
Filed under real-estate, taxes
I’m sure you’ve heard of the $8,000 First-Time Homebuyer Credit – it’s been one of the most buzz-worthy credits of recent years. As of September the tax had benefited more than 1.4 million taxpayers. However, the credit was all set to expire on November 30 which means if you hadn’t found your dream pad, too bad. Luckily due to the huge success of this credit new legislation, the Worker, Homeownership and Business Assistance Act of 2009, was signed into law on November 6, 2009. The new law extends and even expands the first-time homebuyer credit.
The new law stipulates the following…
- Extends deadlines for purchasing and closing on a home.
- Authorizes the credit for long-time homeowners buying a replacement principal residence.
- Raises the income limitations for homeowners claiming the credit.
Basics under the new law…
Eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010.
If you make the qualifying purchase in 2010, you have the option of claiming the credit on either your 2009 or 2010 return.
Long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately).
If you make more money, you may actually qualify now, as the new law extends the chance to folks with higher incomes. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009.
See frequently asked questions about the first-time homebuyers tax credit.
