· To qualify the purchaser must not have owned a home in the last 3 years. Purchaser must owner-occupy the home.
· The tax credit is equal to 10% of the purchase price of the home, not to exceed $8,000.
· Qualifying maximum income limits effective on December 1st, 2009:
$125,000 Adjusted Gross Income for Individuals
$225,000 Adjusted Gross Income for Married Couples
This is an increase from $75,000 and $150,000 respectively from the previous version of the tax credit.
· 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.
· New - Limitation on Cost of Purchased Home - The price of the home cannot exceed $800,000.
· New - Purchase by a Dependent - The home cannot be purchased by a dependent. This rules the transaction ineligible.
· New - 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.
