$8000 Tax Credit Info

$8,000 Tax Credit Now Available

First Time Homebuyers and Others Qualify

The "American Recovery and Reinvestment Act of 2009," passed the House and Senate on Friday, February 13,2009 and was signed into law by President Obama on February 16, 2009.

An $8,000 tax credit (NOT a loan) is now available to many homebuyers.

Quick Facts - Homebuyer Tax Credit
- Homebuyer must be a first time homebuyer OR have not owned a home for the past 3 years

- Purchase must be for a principle residence (no investment homes)

- Home must be purchased on or after January 1, 2009

- Does not require repayment as long as homebuyer stays in the home at least 3 years.

- Applies towards single family detached homes, condos, and townhomes.

- Income cannot be greater than $75,000 yearly for a single buyer, or $150,000 yearly for a married couple.

- Credit is for $8,000 or 10% of purchase price, whichever is less.

The credit is only available for a limited time.

What Does a Tax Credit Mean?
The credit reduces your tax liability, that is, the amount of taxes you are required to pay. Depending on your tax withholdings, you could get a bigger refund or owe less in taxes when you file.

For example:

If your total tax bill is $5000, you've withheld $4,000 throughout the year, and you qualify for the $8,000 tax credit, this is how your tax return might look.

$4,000 paid

-$5,000 owed

Owes $1,000.

Claim $8,000 tax credit.

Refund of $7,000.

In this case, the new homeowner would receive a check of $7,000 from the IRS after filing.