Housing Tax Credit Extended, Enhanced PDF Print E-mail
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Last week brought great news for homebuyers when President Obama signed H.R. 3548 – the law that extends and enhances the federal American Recovery and Reinvestment Act of 2009. The $8,000 credit for first-time homebuyers was set to expire at the end of this month but is now available through next June as long as the buyer signs a binding contract by the end of April.
More importantly, the new enhanced measure increases income limits and expands the program to include a $6,500 credit for existing homeowners who buy a new home after living in their current residence for at least five years.

Thanks to the enhanced extension, buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit. In addition, existing home owners or ‘repeat buyers’ who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence may be eligible for up to a $6,500 tax credit. 
All United States citizens who file taxes are eligible to participate in the program. Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.  
For married couples filing a joint return, the combined income limit is $225,000. Single or head-of-household taxpayers who earn between $125,000 and $145,000 and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit. The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000. 
The eligibility period for the tax credit is for homes purchased after November 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.  
All homes with a purchase price of less than $800,000 qualify including newly-constructed or resale homes, single - family detached homes, townhomes or condominiums; provided that the home will be used as their principal residence. Vacation home and rental property purchases do not qualify.   
A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference. For example, a first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time home buyer tax credit).  
A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit). 
All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.  
This tax credit is a true credit. It does not have to be repaid unless the homeowner sells or stops using the home as their principal residence within three years after the purchase.
What this means to new homebuyers is: not only is there is a greater selection of state - of - the - art new homes available to homebuyers, but the program is stimulating job creation throughout our region and our state.  
So if you are in the market for a state - of - the - art new home here in San Bernardino County, check out the official website at www.federalhousingtaxcredit.com site online.

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PUBLISHED OCTOBER 17, 2009
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