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First-Time Home Buyer Tax Credit Information

The First-Time Homebuyer Credit was a boon for many U.S. taxpayers, especially those men and women who could not previously afford it. According to CNN Money, 1.4 million property buyers asserted the credit by mid-September 2009. The credit finished. If applicants had a contract in place before that date, they have until Oct. 1, 2010, to shut on their houses and be eligible to claim the credit.

Eligible Participants

Property buyers and some repeat homeowners may qualify for the First-Time Homebuyer Credit. Might qualify. Repeat home buyers that have owned and lived in a house as their principal residence for five consecutive years out of their previous eight might also be eligible for the credit.

Income Limits

Applicants that are single might not make over $125,000 annually. Couples may make a maximum of $225,000 annually. Others whose income exceeds the maximum might be eligible for a reduced credit.

Home Price Limits

To be eligible, houses need to cost at least $75,000. Homes that cost less than $75,000 or greater than $800,000 are ineligible for the credit.

Credit Benefit

Based on the amount of applicants as well as the purchase price of the house, first-time home-buying married couples filing a joint tax return can receive a maximum $8,000 credit. If the tax-filing status is single or married filing separately, the credit tops out at $4,000. For repeat home buyers, the maximum credit is $6,500 for married couples and $3,250 for singles. Multiply the purchase price of the house by 10 percent to figure out the credit amount.

Claim The Credit

Qualified applicants must maintain the First-Time Homebuyer Credit through submitting their income tax return. The IRS won’t accept digital tax returns with this credit. Paper filings are accepted. An IRS Form 5405 included and has to be performed in the tax yield.

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