FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Shaded
February 2009
| FEATURE | CREDIT AS CREATED JULY 2008 | REVISED CREDIT- |
| APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008 | EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009 | |
| AMOUNT OF CREDIT | Lesser of 10 percent of cost of home or $7500 | Maximum credit amount increased to $8000 |
| Eligible Property | Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence. |
No Change All principal residences eligible. |
| Refundable |
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser. |
No Change Purchasers will continue to receive refund for unused amount when tax return is filed. |
| Income Limit | Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above thos caps ($95,000 and $170,000). |
No Change Some income limits continue to apply |
| First-time Homebuyer Only | Yes. Purchaser (and purchaser's spouse) may not have owned a principal residence in three years previous to purchase. |
No Change Still available for first-time purchasers only. Three year rule continues to apply. |
| Revenue Bond Financing | No credit allowed if home financed with state/local bond funding. | Purchasers who utilize revenue bond financing can use credit. |
| Repayment | Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing. | No repayment for purchases on or after January 1, 2009 and before December 1, 2009. |
| Recapture | If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale. | If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009. |
| Termination |
July 1, 2009 (But note program changes for 2009) |
December 1, 2009
|
| Effective Date | Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year. |
All revisions are effective as of January 1, 2009.
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