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First Time Home Buyer Programs |
Recent Mortgage News
Homebuyer Tax Credit Now in Place
The Treasury Department has moved at record speed to implement one
piece of the new American Recovery and Reinvestment Act of 2009
Act aka the stimulus act.
The Department and the Internal Revenue Service which will manage
it announced on Wednesday that forms and regulations are already
in place for homebuyers who wish to claim the first-time credit
enabled under the act.
The credit is available to homebuyers who purchase a home before
December 1 of this year. In an effort to make the effects of the
credit felt quickly in the economy, homebuyers can claim the
credit either on their 2009 tax return or immediately on the 2008
return due in April.
The tax credit represents 10 percent of the purchase price of a
home up to a maximum of $8,000 or $4,000 for married taxpayers
filing separate returns. The $7,500 credit that was authorized
under earlier legislation last year was actually a 15 year loan;
the new tax credit does not have to be repaid by the homeowner
under ordinary circumstances.
The credit does have to be repaid if the homeowner sells the home
in less than 36 months or if the home ceases to be his principal
residence during that time.
For the purpose of this credit, a first time homeowner is defined
as one who has not owned a home for the 36 months ending on the
date of purchase.
The credit is available to taxpayers with adjusted gross incomes
up to $75,000 or $150,000 for married taxpayers filing jointly.
Above those income levels the credit is phased out gradually.
Homeowners who purchased a house between April 8 and December 31,
2008 are not eligible for the new credit. They are covered by the
earlier legislation and can claim the $7,500 repayable credit.
Treasury Secretary Tim Geithner said in a press release from his
department, "The expansion of the first-time home buyer tax break
as part of the President's recovery agenda gives money to
taxpayers when they need it most, while also targeting an
important group of buyers. We view our economic recovery plan, our
financial stability plan, and now this homeowner affordability
plan as three legs of the same stool - an integrated whole that
represents our immediate response to the current crisis."
Forms and instructions for claiming the credit on 2008 tax returns
are available at www.irs.gov.
The form number is 5405.
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