Who is Eligible for the tax credit?
- First-time home-buyers (buyers who haven't owned a home in the last 3 years would also qualify as "first-time" buyers)
- Buyers must make less than $75,000 for singles or $150,000 for couples. (higher-income buyers could receive a partial credit.)
Rules to Remember
- The purchase of the home much be made between Jan. 1, 2009 and Nov. 30, 2009.
- The buyers must live in the house for 3 years or more, or they will have to pay back the tax refund.
- The refund amount is $8,000 or 10% of the home value - whichever one is less.
Tax Rebate, refund, credit, deduction?
As Obama's plan has developed, there have been lots of ideas tossed around from the Senate and the House, but lets look at the final product. The examples below assume that you qualify for the homebuyer credit from the requirements above.
It is not a tax-deduction.
An example of a tax deduction would be someone making $50,000 a year would only have to pay taxes on $42,000 ($50K - $8K = $42K). While that is nice, this is a whole lot better for individual taxpayers.
It is a tax credit.
Since it is a tax credit, it will show up a tax refund for most people. For example, if you paid $3,000 in taxes this year and after doing your taxes found out that the IRS owed you a $500 refund, you would now get $8,500 back.
The only way you wouldn't get at least $8,000 back is if after doing you owed $1,000 to the IRS, you would then get a refund check of $7,000 ($8,000 - $1,000).
What you need to do to get it
- Buy a house before November 30th, 2009.
- Claim it on your tax return
Click for more Info: http://www.federalhousingtaxcredit.com/index.html
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