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$8,000 TAX CREDIT

Expanded Tax Break Available
for 2009 First-Time Homebuyers

2009 Limited Time!
Up To $8,000 Tax Credit to Buy a Home!
R-2009-14

WASHINGTON - The Internal Revenue Service announced that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.

"For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit," said IRS Commissioner Doug Shulman. "This important change gives qualifying homebuyers cash they do not have to pay back."

The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on www.IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.

This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.

Who is eligible?

First home buyers that have not owned a home for the preceding three years.

Are there income limits to qualify?

Yes, The tax credit is available for married couples filing a joint return whose income is $150,000 or less and for other taxpayers with an income of $75,000 or less.

How will the buyer receive the tax credit?

The tax credit will reduce the taxpayer's bill or increase his or her refund, and will be paid out to eligible taxpayers, even if they owe no tax or the credit is more then the tax that they owe.

Does the buyer have to repay the $8,000?

No, the tax credit is not a loan, it is a true tax credit. Repayment is not required unless you sell the home within three years.

What are the effective dates of the new tax credit?

The tax credit will apply to home sales that close on January 1, 2009 through November 30, 2009.

How much does the buyer receive?

Ten percent of the purchase price of the home up to a maximum of $8,000 for a single resident or a married couple filing jointly.

What are the effective dates?

The tax credit will apply to home sales that close on January 1, 2009 through November 30, 2009.

Where can the buyer get more information?
Visit the IRS Website or contact Maggie McFarland for more information www.irs.gov