First-Time Homebuyer Tax Credit
Tax Credit to Aid Homebuyers
If you plan to buy your first home—or if you’ve already bought it—in
2009, you should know about and begin to plan for a new tax credit that was recently
put into place. Even if you already know about the credit, you might not be aware
of changes made to it by President Obama’s American Recovery and Reinvestment
Act of 2009. These changes could mean a greater benefit for you. For example:
- Unlike the 2008 first-time homebuyer credit, this credit need not be repaid
as long you own your house for at least three years and it remains your principal
residence during that time.
- The First-Time Homebuyer Credit will now allow taxpayers a credit of up
to $8,000.
Claiming this credit does not necessarily disqualify you from claiming another homebuyer
credit (for example, a state Federal Housing Administration loan); you may be able
to claim multiple such credits on your home purchase.
Listen to information about
First-Time Home Buyer Credits
Are You Eligible for the Credit?
- Even if the home you purchased this year wasn’t your first, you may still
be eligible to claim the credit. Homebuyers who have not owned a primary residence
for three years leading up to the date of purchase qualify for this credit. For
married couples, this restriction applies to both spouses.
- The homebuyer tax credit will be paid to eligible taxpayers even if they don’t
owe any tax or the credit is more than what they owe.
- The credit begins to phase out for taxpayers whose modified adjusted gross income
is greater than $75,000 for single filers ($150,000 for married filing jointly).
The credit phases out entirely at $95,000 ($170,000 married filing jointly).
- The purchase of your home must be completed between January 1, 2009 and November
30, 2009 to be eligible for the credit.
- The credit may be claimed only on a
primary residence.
- Even if you owe no tax, or if the credit exceeds what you owe, you will still receive
the credit if you are eligible.
For information on determining
if you qualify for this credit
Claiming the Credit
- If you purchased or will purchase in 2009, you may choose between
claiming the credit on your 2008 or 2009 return. How to choose which year to claim
the credit? If your income is lower in 2009 than it was in 2008, you might qualify
for a higher credit in 2009, so it could be worth it to wait until early 2010, when
you file your 2009 return, to claim the credit.
- During your tax preparation
on efile.com the eFile tax preparation software will select the correct tax form
for you and let you print or efile the form with your tax return.
- You may file
an amendment on your 2008 return allowing
you to claim the credit.
If You Purchased in 2008…
Only first-time homebuyers whose purchase falls between January 1, 2009 and November
30, 2009 qualify for President Obama’s new tax credit of up to $8,000. However,
taxpayers who purchased their first homes between April 8, 2008 and January 1, 2008
may be eligible for a different tax credit, of up to $7,500, to be paid back interest-free
in 15 equal yearly installments. If you didn’t claim this credit on your 2008
tax return but think you might be eligible for it, you can file an
amendment. You can also file an amendment if you purchased a home in early
2009 and claimed the credit on your 2008 returns but now want to take advantage
of the 2009 credit instead.
Read more details on the first-time homebuyer tax credit.