Bentley Mortgage Blog

Eligibility

. The $8,000 tax credit is available for first-time home buyers only.

. The law defines a first-time home buyer as a buyer who has not owned a home during the past three years.

. All U.S. citizens who file taxes are eligible to participate in the program.

Homes that Qualify

. All homes, whether newly-constructed or existing, single-family, townhomes or condominiums will qualify.

. The home must be used as a principal residence.

Income Limits

. Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their adjusted gross income (AGI) is less than $75,000.

. Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.

. For married couples filing a joint return can claim the full $8,000 credit if their adjusted gross income (AGI) is less than $150,000.

. Married couples filing jointly who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.

. The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples filing jointly with an AGI that exceeds $170,000.

Effective Dates

. Between January 1, 2009, and before December 1, 2009. To qualify, you must actually close on the sale of the home during this period.

Tax Credit is Refundable

. A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.

- For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.

- If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus ---$8,000 from the home buyer tax credit).

Payback Provisions