Tax Credit Extension

The tax credits, added by the Senate, center on extending the popular $8,000 credit for first-time homebuyers that was included in the stimulus package. The credit, which was to expire at the end of this month, will be available through next June as long as the buyer signs a binding contract by the end of April.

The program is expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least five years.

The credit, said Democratic Rep. Shelley Berkley of Nevada, a state particularly hard hit by the recession, "will allow more people to purchase a home in my district and help stop the continued downward spiral in housing prices caused by the foreclosure crisis."

Prolonging the life of the homebuyer credit has been a priority of the real estate industry, which says it has been instrumental in beginning to turn around a market that was a major cause of the economic downturn. About 1.4 million first-time homebuyers have qualified for the credit through August, and the National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Original First Time Homebuyer Tax Credit

-$8,000 first time homebuyer federal tax incentive-

The information on this page pertains to the American Recovery and Reinvestment Act of 2009.

The 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 credit is available for homes purchased after January 1, 2009 and closed by November 30, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

The American Recovery and Reinvestment Act of 2009 has made now a great time to buy a quality new home. The new stimulus bill has many advantages for home buyers, including up to an $8,000 federal tax credit for first-time buyers*. Georgia will also offer up to $1,800 in tax credits to Georgia homebuyers via a credit on their state income tax. House Bill 261 gives a credit of either $1,800 or 1.2 percent of the purchase price, whichever is less. (You can only claim one-third of the credit each year, beginning with your 2009 Georgia tax return.) The law defines a first time buyer as anyone who has not owned a home in the last three years.

For people who recently purchased a home or are considering buying in the next few months, there are several different ways that you can get this federal tax credit even if you've already filed your 2008 tax return! Qualifying first-time homebuyers who close on a home between January 1, 2009 and November 30, 2009, could receive up to $8,000, or $4,000 for married individuals filing separately.

Buyers may claim the federal tax credit on their 2008 taxes even if the closing occurs in 2009. A qualified buyer may get the credit for the 2008 tax year by filing an amended 2008 tax return after closing. Qualified buyers may also claim the credit in 2009 rather than in 2008. There are a number of filing options that may be available to you. Visit www.IRS.gov for more tax information on filing options.

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