Did you think that you missed out on a chance at the $8,000 tax credit given to first time home buyers?  You are in luck!  First time home buyers now have until April 30, 2010 to buy their home.  In addition, current home owners who have lived in their home for 5 consecutive years out of the last 8 years is eligible for a $6,500 tax credit.

First, let’s talk about the extended $8,000 tax credit for first time home buyers.  As stated above, you must be under contract by April 30, 2010 and close by June 30, 2010.  To stay safe we encourage buyers to close by the April 30 deadline to prevent any problems or delays which could cause you to miss out on the tax credit all together.  Also, a new provision to prevent fraud has been added.  When you file your return (either an amended 2009 return or 2010 return) you must attach proof of your purchase.  This will likely be a copy of the HUD-1 settlement statement that you receive when you close.  Lastly, the income limits for eligible buyers has increased.  For a single person the limit increased from $75,000 to $125,000.  Married couples went from $150,000 to $225,000 combined income.

Now for the BRAND NEW tax credit for current home owners.  If you have lived in your home for 5 consecutive years out of the past 8 years then you are eligible for a $6,500 tax credit.  In addition, the buyer(s) must meet the same income limits as above and the purchase price cannot exceed $800,000.  The timing of this tax credit is the same as the first time home buyer tax credit so buyers must be under contract by April 30, 2010.

Both tax credits have a “phase out” of $20,000 for the income limits.  In other words if a single buyer makes more than $125,000 but less than $145,000, they are eligible for a portion of the tax credit. 

If you have other questions about the tax credit please e-mail Brian at BrianHourigan@kw.com . 

We are not tax accountants so you will want to consult your CPA to verify your eligibility so that you can make an informed decision. 

For more information visit http://www.federalhousingtaxcredit.com/

Want to hear what the IRS has to say? Read HERE

Happy Home Hunting!