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Claim Your Homebuyer Tax Credits

The Homebuyers Tax Credit has been extended into 2010, and both first-time buyers and current homeowners may be able to claim up to $8000 on a principal residence bought in 2009 or early 2010. Eligibility depends on a number of factors, including income, homeownership status, and the exact purchase date of the home.

To be considered a first-time homebuyer by the IRS, you must have not owned a home for the three years prior to your purchase. To be eligible for the tax credit as a current homeowner, you must have lived in your home for five consecutive years over the past 8 years. Homebuyers who buy a home between Nov. 7, 2009, and April 30, 2010 qualify.

Rules for first-time homebuyers:

First-time homebuyers who purchase a home between Nov. 7, 2009, and April 30, 2010 may be entitled to a tax credit up to 10% of the home sale price or $8,000, whichever is less. The home can’t cost more than $800,000. Income restrictions apply, and the tax credit begins to disapper at an income level of $225,000 for joint tax filers and $125,000 for individual tax filers.

You can earn the tax credit even if you do not own federal tax or you have little income. In this case, the tax credit becomes ‘refundable’, and you may receive the tax credit dollars by check or electronic deposit.

Tax credit for longtime homeowners:

If you’re a longtime homeowner and have lived in your primary residence five consecutive years out of the last eight, you may qualify for a homebuyer tax credit worth up to $6,500. Like a first-time homebuyer, you must enter into a home buying contract before April 30, 2010. Identical income resrictions apply, and the home can’t cost more than $800,000.

Many different kinds of principal residences qualify for the tax credit, including townhomes and condominiums. Mobile homes may also qualify, even if the land is leased. Make sure to check with a qualified accountant to ensure that you are eligible.

Marni and Scott