The "Worker, Homeownership, and Business Assistance Act of 2009," which was signed into law on November 6, 2009, made significant changes to the homebuyer tax credit. Here are the details.
CREDIT EXTENDED. The new law makes the credit available through April 30, 2010. If your transaction is incomplete as of April 30, you'll still be able to claim this tax break on your 2009 or 2010 return, provided you have a binding written contract and close by June 30, 2010.
In most cases, the amount of the credit remains the same - 10% of the price of your new home, up to a maximum of $8,000 - and it's still refundable. In addition, recapture requirements are unchanged. That means you won't have to pay the money back as long as you live in your new home three years.
PURCHASE PRICE RESTRICTION. For homes bought after November 6, 2009, the credit is available only when the total purchase price is less than $800,000.
RELAXED ELIGIBILITY REQUIREMENTS. You're now a "first-time homebuyer" if you used the same residence as your main home for five consecutive years of the eight years prior to buying the new house. However, if you qualify under this rule, the credit is limited to a maximum of $6,500.
INCREASED INCOME PHASEOUTS. If you purchase or close on your new home between November 6, 2009, and June 30, 2010, the credit begins to shrink when your modified adjusted gross income reaches $225,000 if you're married filing jointly. The threshold is $125,000 if you're single.
MINIMUM AGE AND DEPENDENCY STATUS. You or your spouse must be at least 18 years old and not claimed as a dependent on anyone else's return.
UNRELATED SELLER. The person you purchase the house from cannot be a relative.
RETURN ATTACHMENTS. You'll have to include a copy of the closing statement with your tax return.
Please contact us at 828-654-6226 or email us at info@howellsullivan.com if you would like more information about the homebuyer's credit.