Tax Credit Extension Approved

A good portion of the last few months home sales across the nation have been attributed to the federal tax credit for up to $8,000 for first-time home buyers. With the tax credit set to expire on Nov.30 of this year, buyers were rushing to close homes before the deadline. Now there is good news for potential home buyers that were worried that they would not be able to close on a home before the deadline. In the first week of November, the tax credit was extended until spring of 2010. Amendments were made to the program to make credits available to more than just first time home buyers.

There are some of the details as far as who qualifies for the credit and what is required. The tax credit is 10% of the purchase price of the home, a maximum of the $8,000 and up to $6,000 for repeat home buyers. If you have owned a home in the last three years you are considered a first-time home buyer. If you want to qualify as a repeat buyer, you must have owned your current home for at least five years. The credit is unavailable for homes costing more than $800,000.

The tax credit qualifying deadlines are April 30 and June 30 of 2010. All purchase agreements must be signed by April 30, 2010. All closings on the property must be finalized by June 30, 2010. A deadline extension is available for members of the military who have served outside the United States for a period of at least 90 days between January 1, 2009 and May 1, 2010. The extension is a year for members of the military that meet the above requirements.

A full credit is available to individual filers with an annual income of up to $125,000 and joint filers with combined incomes of up to $225,000. A reduced credit is available to individual filers with an annual income up to $145,000 and joint filers with combined incomes of up to $245,000.

Qualifying home buyers can claim the credit on their federal income tax returns if the amount of the credit exceeds the amount owed on taxes, the government will issue a payment. If a buyer wants a quicker payment they can amend their 2008 tax return.