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Expanded Tax Break Available for 2009 First
Time Homebuyers
On February 25, 2009, the Internal Revenue Service announced that
taxpayers who qualify for the first-time homebuyer credit and
purchase a home this year before December 1st have a special option
for claiming the tax credit either on their 2008 tax returns due
April 15 or on their 2009 tax returns this year.
Qualifying taxpayers who buy a home this year before December 1st
can get up to $8,000.00, or $4,000.00 for married filing separately.
"For first-time homebuyers this year, this special feature can put
money in their pockets right now rather than waiting another year to
claim the tax credit" said IRS Commissioner Doug Shulmah.
"This important change gives qualifying homebuyers cash they do not
have to pay back."
The IRS has posted a revised version of Form 5405, First-Time
Homebuyer Credit, on www.IRS.gov.
The revised form incorporates provisions from the American Recovery
and Reinvestment Act of 2009. The instructions to the revised
Form 5405 provide additional information on who can and cannot claim
the credit, income limitations and repayment of the credit.
This year, qualifying taxpayers who buy a home before December 1,
2009, can claim the credit on either their 2008 or 2009 tax returns.
They do not have to repay the credit, provided the home remains
their main home for 36 months after the purchase date. They
can claim 10 percent of the purchase price up to $8,000.00, or
$4,000.00 for married individuals filing separately. If two or
more unmarried individuals buy a main home, they can allocate the
credit among the individual owners using any reasonable method.
The amount of the credit begins to phase out for taxpayers whose
adjusted gross income is more than $75,000.00, or $150,000.00 for
joint filers.
For purposes of the credit, you are considered to be a first-time
homebuyer if you, and your spouse (if you are married), did not own
any other main home during the three-year period ending on the date
of purchase.
The IRS also alerted taxpayers that the new law does not affect
people who purchased a home after April 8, 2008, and on or before
December 31, 2008. For these taxpayers who are claiming the
credit on their 2008 tax returns, the maximum credit remains 10
percent of the purchase price, up to $7,500.00, or $3,750.00 for
married individuals filing separately. In addition, the credit
for these 2008 purchases must be repaid in 15 equal installments
over 15 years, beginning with the 2010 tax year.
(Thank you to Boyle, Platte & Kee, LLP for providing the above
information) |
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