Congress Extends the Tax Credit for Home Buyers My realtor forwarded the following relating to the current/extended tax credit program…. New Legislation New legislation, the Worker, Homeownership and Business Assistance Act of 2009, which was signed into law on Nov. 6, 2009, extends and expands the first-time homebuyer credit allowed by previous Acts. The new law: · Extends deadlines for purchasing and closing on a home. · Authorizes the credit for long-time homeowners buying a replacement principal residence. · Raises the income limitations for homeowners claiming the credit. Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return. For the first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after Nov. 6, 2009. The credit phases out for individual taxpayers with modified adjusted gross income (MAGI) between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers. The existing MAGI phase-outs of $75,000 to $95,000 or $150,000 to $170,000 for joint filers still apply to purchases on or before Nov. 6, 2009. Here is some bullet point information on the two tax credits that are now out there. $8,000 First-time Home Buyer Tax Credit at a Glance · The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase. · The tax credit does not have to be repaid. · The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000. · The tax credit applies only to homes priced at $800,000 or less. · The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify. · For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly. · For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit. The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance · To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years. · The tax credit does not have to be repaid. · The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. · The tax credit applies only to homes priced at $800,000 or less. · The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010. · Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.