$8,000 TAX CREDIT FOR FIRST-TIME BUYERS

First-time home buyers will get a tax credit windfall if they buy before December 2009. As part of the economic stimulus bill, first-time home buyers can claim a credit worth $8,000 (or 10% of the homes value, whichever is less) on their 2008 or 2009 taxes.

This credit is refundable, meaning that tax filers see a refund of the full $8,000 even if their total tax bill was less than that amount. Unlike the earlier version of the tax credit which really was a loan, this tax credit does not have to be paid back if the buyers live in the home for at least 3 years.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers must be first-time home buyers, meaning they cannot have owned a home in the past three years.

There also are income restrictions. To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. Higher income buyers may receive a partial credit up to a certain amount of income.

Taxpayers who already have completed their 2008 returns can file amended returns for 2008 in order to claim the credit.

Stimulus Bill

The current stimulus bill that will be signed by the President tomorrow allows for a Tax Credit of $8,000 for first time home buyers. This is a pure credit! If you have been considering buying a home, now is the time to act. Prices are down, interests rates are at historic lows. This is truly a great time to buy a home.