· This program becomes effective December 1st, 2009.
· To qualify the purchaser must document that their sold home or home being sold was used as a principal residence consecutively for 5 of the last 8 years. Purchaser must owner-occupy the home.
· The tax credit is equal to 10% of the purchase price of the home, not to exceed $6,500.
· Qualifying maximum income limits as of December 1st:
$125,000 Adjusted Gross Income for Individuals
$225,000 Adjusted Gross Income for Married Couples
· If a taxpayer owes less than the tax credit, the government will send a check for the difference. If the taxpayer is due a refund, the reimbursement will be the refund due + the tax credit.
· Recapture provision: The tax credit is not required to be repaid unless the home is sold within the first three years of ownership.
· Binding Contract Provision: To qualify for the tax credit, the purchaser must have a binding contract effective on or before April 30, 2010 with the closing happening before July 1st, 2010.
· Limitation on Cost of Purchased Home - The price of the home cannot exceed $800,000.
· Purchase by a Dependent - The home cannot be purchased by a dependent. This rules the transaction ineligible.
· Anti Fraud Rule - The purchaser must attach documentation of purchase to tax return.
· The purchaser is eligible to claim the credit on their 2009 or 2010 tax return. They should discuss the details of how to file for the credit with their CPA.
