The deadline for purchasing a home in order to qualify for the extended and expanded Home Buyer Tax Credit program is fast approaching. Homebuyers must be under contract to purchase a home no later than April 30, 2010; the home must close no later than June 30, 2010. “Move up” buyers (those who own a home and have lived in it for 5 of the last 8 years) may be eligible to receive a tax credit of up to $6,500.
The tax credit’s basic eligibility requirements remain the same:
- You can’t purchase the home from a parent, spouse, or child
- You can’t purchase the home from an entity in which they’re a majority owner
- You can’t acquire the home by gift or inheritance
- All parties to the purchase must meet eligibility requirements set forth by the IRS
The new law includes some notable updates. First, the subject property’s sale price may not exceed $800,000. Homes sold for more than $800,000 are ineligible. And, household income thresholds have been raised to $125,000 for single-filers and $225,000 for joint-filers.
This program is a true tax credit — not a deduction. For example, a tax filer who is eligible for the full $8,000 credit and has a tax liability of $5,000 would receive a $3,000 refund from the I.R.S.
Visit www.irs.gov for a complete list of qualifying criteria. Review it with a tax professional to determine your eligibility. Then mark your calendar for April 30, 2010.