• Archive of "American Reinvestment and Recovery Act" Category

    American Recovery and Reinvestment Act: First-Time Homebuyer Tax Credit

    April 20, 2009 // No Comments »

    By:  Ann Belfield

    Now is an opportune time to be a first-time homebuyer. The Federal government, along with many municipalities, is offering opportunities for homebuyers through the American Recovery and Reinvestment Act (ARRA). One such program is the First-Time Homebuyer Tax Credit. Through December 1, 2009, first-time homebuyers, defined as purchasers who have not owned a principal residence in the previous three years, are eligible for up to an $8,000 tax credit. The program is for a principal resident only. Below are the stipulations under the program as found in the American Reinvestment and Recovery Act.

    American Recovery and Reinvestment Act

    First-Time Homebuyer Tax Credit

    Feature

    The Credit Stipulations

    Amount of Credit

    Maximum credit amount: $8,000

    Eligible Property

    All Principal Residences are eligible.

    Refundable

    Yes. The credit reduces (or can eliminate) income tax liability for the year of the purchase. Any unused amount of tax credit is refunded to the purchaser. Purchaser will continue to receive refund for unused amount when tax return is filed.

    Income Limit

    The full amount of credit is available for adjusted gross income up to $75,000 for individuals & up to $150,000 for joint returns. The credit phases out above the caps of $95,000 for individuals and $170,000 for joint returns.

    First-time Homebuyer Only

    Purchaser (and purchaser’s spouse) may not have owned a principal residence for 3 years prior to purchase.

    Revenue Bond Financing

    Purchasers who utilize revenue bond financing can use the tax credit

    Recapture

    If the home is sold within three years of purchase, the entire amount of credit is recaptured on the sale. This applies only to home purchased in 2009.

    Termination

    December 1, 2009 is the end of the tax credit.

    Effective Date

    This tax credit program is effective as of January 1, 2009.

    Below is a video that explains the details of the Federal Housing Tax Credit.

    Sources:

    IRS.gov: http://www.irs.gov/newsroom/article/0,,id=204671,00.html

    Full Summary of IRS Information Related to the American Recovery and Reinvestment Act of 2009: This site contains all of the links to IRS Tax Related Provisions associated with the American Reinvestment and Recovery Act.

    The American Recover and Reinvestment Act of 2009 Full Summary of provision from the Senate Finance, House Ways & Means Committees: (PDF document of 19 pages).

    National Association of Home Builders. This site presents details of frequently asked questions relating to the tax credit.

    Information deemed reliable, but not guaranteed.  Check the recovery.gov website to confirm pertinent information.

    WordPress Plugin

    Posted in American Reinvestment and Recovery Act