Here’s answers to some frequently asked questions about the 2009 Federal Housing Tax Credit.
- Tax credit is $8,000.00, or up to 10% of the value of the home, so unless you’re buying a house less than $80,000, you’ll get the full $8,000 credit.
- You qualify if you made $75,000 or less on 2008 taxes if filed as single – if filing jointly, you qualify if you made $150,000 or less.
- If you make more than $75,000 but less than $95,000 ($170,000 if filing jointly), you can still get a partial tax credit.
- Tax credit applies to first-time home buyers. You are a first-time home buyer if you have not owned a home in the previous three years. (Technically, this doesn’t apply to just “first-time” home buyers, then.)
- Applies to your primary residence only.
- This is a tax credit, not a deduction – meaning your tax “bill” will be reduced, not your taxable income. For instance, if you underpaid your taxes by $3,000, the first $3,000 of the credit will be applied to your outstanding tax bill and you would then receive the remainder of $5,000. If all your taxes were correctly withheld from your paychecks and you don’t owe anything when you file your taxes, you’ll get all $8,000 to yourself.
- Credit will be applied against your tax bill for either 2008 or 2009. If you’ve already filed your 2008 taxes, you can amend it to reflect the credit. Use IRS Form 5405 to file for the credit. According to TurboTax, an update will be released mid-March 2009 to reflect the new IRS Form 5405 if you wish to use their software to e-file.
- Credit applies to homes purchased from January 1st, 2009 to November 30, 2009. You must close on the house by November 30th in order to claim the credit.
- Unlike an earlier version of this bill, this credit does not have to be repaid, unless you sell the house in less than three years.
- Applies to new or existing homes.
If you still have questions, please feel free to call or text Jeremy at 719.231.9043 or email jeremy@circarealestategroup.com. We’ll give you a prompt answer to any question you may have.
