$8,000 Tax Credit Made Simple:

 

There has been a lot of misunderstanding regarding the $8,000 Tax Credit for 1st time homebuyers.  To simplify this great opportunity, I would like to make reference to the following:

  1. The Tax Credit has been increased to $8,000 and the repayment feature is eliminated for the 2009 purchaser.  Yes, at one time it was $7,500 (with repayment) but that program is not the one currently being offered.

  2. Any home purchased as a primary residence in the $80,000 or more qualifies for the full $8,000. 

  3. If the home you are purchasing costs less than $80,000, the credit will be 10% of the cost. For example, if you are purchasing a home for $70,000, the tax credit would be $7,000.

  4. The credit is available for the purchase of a principle residence on or after January 1, 2009 and before December 1, 2009.

  5. A first time homebuyer is anyone who has not had any ownership interest in a home in the past three years.

  6. Credits are claimed on an individual's income tax return.

  7. If you owe the IRS $2,000 and you qualify for the $8,000 tax credit, you would receive a refundable credit of $6,000.  This is the tax credit minus the amount owed to the IRS for tax liabilities. 

  8. The income restriction is as follows:  If you are single or (head of household) your income can be no more than $75,000.  Married couples who file a joint return may have a combined income of no more than $150,000. 

  9. As long as you remain in the home for three (3) years, you do not have to repay the tax credit.

  10. Instructions regarding this tax credit can be found at www.irs.gov.

 

For more information on the $8,000 Tax Credit, please submit your question(s) below.  Please allow 1-2 business days to respond to your Tax Credit question(s).  I am not a tax professional but will answer basic questions regarding the tax credit to the best of my ability. 

 

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