2009 Home Buyers Credit

Have you been considering buying a new home this year?  Have you heard people talk about a big credit if you are a first time home buyer?  Well the good news is the talk is true.  The bad news is that the credit expires November 30, 2009, so you don’t have a lot of time to take advantage of this offer.

The credit is for those buyers who have not owned a home in the last 36 months and buy a home within the US between Jan1 and Nov 30, 2009.  In addition, your modified adjusted gross income must be less than $150,000 if married, and $75,000 if single to receive the full credit.  There is a $20,000 phase-out of the credit above these limits.  Just a side note, this credit is only available for your primary residence.  If you still qualify after these two tests, than you obviously want to know how much the credit is, and how you go about claiming it. 

The credit is 10% of the purchase price up to a maximum credit of $8,000.  As long as you live in the house for 36 months you will not have to repay the credit.  This is a big improvement over the credit in 2008.  If you have not yet filed your tax return for 2008, you simply attach a form 5405 with the return to claim the credit.  Of course you must have already finalized the purchase of you new home.  You can’t claim the credit based on the assumption that you are going to close on a home before Nov 30, 2009.  If you have already filed you r 2008 return you have two options. You can wait until 2009 and claim the credit then, or you can amend your 2008 return and claim the credit now.

There are exceptions to who may claim the credit. As I already stated if your income exceeds the phase-out range you do not qualify.  You can not buy your house from a relative. An example would be your spouse, parent, grandparent, child or grandchild.  The home has to be your primary residence and you cannot have owned a home in the last 3 years.  You can not take the credit for your vacation home etc.  If you are a nonresident alien you do not qualify.

If you have additional questions you can contact us or go to http://www.irs.gov for additional information.

The information contained on this site should in no way be considered to be professional advice in the form of either tax, accounting, or legal service or consultation. You should always consult with a professional familiar with your individual circumstances before making any specific decisions related to accounting, tax, or legal matters.