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First-Time Home Buyer Tax Credit
CLOSING DEADLINE EXTENDED TO 9/30/2010
Note: This page has been updated to reflect changes and extensions to the homebuyer tax credit. Read the following blog posts for a summary of changes.
The American Recovery and Reinvestment Act of 2009 authorized a tax credit of up to $8,000 for qualified first-time home buyers. This legislation has been extended through September of 2010 and now includes a tax credit for current homeowners of up to $6,500.
Home Buyer Tax Credit at a Glance
- The first time homeowner tax credit is for first-time home buyers or buyers who have not owned a principal residence for 3 years prior to the purchase. The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.
- The $6,500 tax credit has been added to the program for current homeowners who have lived in their primary residence for at least 5 of the past 8 years.
- The tax credit does not have to be repaid, unlike the previous tax credit in 2008.
- The tax credit is refundable, so you can claim the credit whether you have offsetting tax liability or not.
- The credit is available for homes under contract by April 30, 2010 and purchased (closed and transferred) on or before September 30, 2010
- Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit. Partial credits may be available for those who exceed these income limits.
- The cost of the purchased home is limited to $800,000.
- Claim your credit using IRS form 5405.
Download form 5405 from the IRS web site
What do I do next?
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First-Time Fundamentals
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