Homeowners Tax Credit

June 8, 2009 – 10:47 am

By Petya Kirkova

    Being already in the middle of the year, leaves perspective home owners with a little over six months, in which they can take advantage of the American Recovery and Reinvestment Act of 2009. One of the key highlights of the legislation, approved and signed by the President, is the expanded First-Time Homebuyers Tax Credit. The already insecure real estate market is less than attractive, and not surprisingly so considering the circumstances, so future buyers can very well use an incentive when making a decision whether to purchase a home this year or not. For those, making the big decision for the first time in their lives, opting out for signing on the dotted line before 1 December of 2009 can be one smart financial move.

    According to the Act, first time homeowners can be eligible for a credit of up to $8,000 with no payback requirement. The sweet deal comes with a few requirements and limitations, including the home being the principle residence of the tax payer (vacation and rental properties are excluded), certain income limits ($150,000 or less combined income for married couples, or $75,000 for other taxpayers), as well as a condition of repaying the tax credit if within 36 months of the purchase date, the home is no longer used as a principle residence.The form necessary to claim your credit can be found here http://www.irs.gov/pub/irs-pdf/f5405.pdf, and if you and your partner are not married, but you qualify, you should probably take a look at a different section, providing guidance for your specific situation http://www.irs.gov/pub/irs-drop/n-09-12.pdf.

    Whatever the situation  in your corner might be, always make sure to get the correct information about what is that you are entitled to. Most of the time you can find millions of websites, explaining what and how it is done, and at least half of them are asking for a fee for this, that or the other. The only way to assure yourself a headache-free experience is to go directly to the source, which is usually a government website. In this case more detailed information can be found at the Q&A section of the IRS website, concerning the credit http://www.irs.gov/newsroom/article/0,,id=206291,00.html