The 2009 Federal Housing Tax Credit for first time home owners is a new tax credit that can make buying a new home much more affordable. This tax credit is part of the American Recovery and Reinvestment Act of 2009 and is available for up to $8,000.
One of the things that sets this tax credit apart from other home buyers tax incentives is that it does not need to be repaid. As long as you keep the home as your primary residence for at least three years, the tax credit there is no obligation to repay this tax credit. Previously, the government has offered tax credits for new home buyers that were simply no-interest loans, but Obama’s First Time Home Buyers Tax Credit is offered as a one time payment.
There are several requirements that must be met to be eligible to receive Obama’s First Time Home Buyers Tax Credit. The main requirement is that neither you or your spouse has owned a primary residence in the last three years. The home must also have been purchased in 2009 between January 01 and December 01. Those who purchased a home in 2008 are also eligible to receive a tax credit, but this credit needs to be repaid.
The first time home buyers tax credit is based upon 10% of the homes selling price, up to $8,000. Even people who do not owe anything in income tax can receive this tax credit, providing they meet the other requirements.
There is an annual income level set at $75,000 for single home buyers and $150,000 for married couples. However, those who have an income higher than this may still be able to receive a partial tax credit.
In addition to traditional single family homes, Obama’s 2009 Tax Credit for first time home buyers can be used on mobile homes, condominiums, new construction, manufactured homes, and even house boats. However, the home can not be a gift from a family member.
Claiming the first time home buyers tax credit is very easy and can be done on either your 2008 or 2009 tax return. There is only one extra form that must be completed and even if you have already filed your 2008 tax return, it is possible to file an amended tax return and receive your tax credit check within 8 weeks of submitting your amended tax return.
This Federal Housing Tax Credit is mainly available to those who are American Citizens, although exceptions may be made for non-residents with valid visas.
Obama’s tax credit is designed to help stimulate the housing market and offer an incentive for first time home owners. This tax credit can be a great way for those applying for their first mortgage to help offset the cost of the down payment or to greatly increase the equity in their home. It is, however, important to note that if you currently owe the IRS money on your taxes, they will use the tax credit to pay this balance and refund you the difference.
Over the past few months, it seems that congress and President Obama have passed a great number bills to help stimulate the economy. While many of these bills are viewed mainly as a bailout to some of the very people who got us into this mess in the first place, the First Time Home Buyers Tax Credit can actually help the people who need it the most.
The First Time Home Buyers Tax Credit is part of the American Recovery and Reinvestment Act of 2009, which is an economic stimulus packaged passed signed into law by President Obama on February 17, 2009.
The American Recovery and Reinvestment Act is intended to help jump start the economy and contains a number of provisions, including expanded unemployment benefits, tax relief, as well as the first time home buyers tax credit. Of the $787 Billion Dollars allotted for the American Recovery and Reinvestment Act $237 Billion is slated for individual tax relief, $51 Billion for Corporate Tax Relief, and almost $148 Billion has been set aside for healthcare. Other funds will goto housing, HUD, scientific research, Energy, and Infrastructure.
$6.6 Billion dollars has been allotted for the first time home buyers tax credit, which provides up to $8,000 towards the purchase of a home for qualified citizens. In order to be eligible to receive the tax credit, the buyer, and their spouse, muse not have owned a primary residence in the last 3 years and must make less than $75,000 a year, or $150,000 for couples. The tax credit is figured off of 10% of the value of the home up to $8,000.
The first time home owners tax credit can be used on almost any type of home, including houseboats, mobile homes, new construction, single family homes, manufactured homes, and condominiums. In order to qualify, the home must be purchased between January 1, 2009 and December 1, 2009.
This is not the first time that the Federal Government has offered an incentive to new home buyers. In fact last year, with the passage of the Housing and Economic Recovery Act of 2008, an $8,000 no interest loan was made available for those who purchased a home between April 8, 2008 and December 1, 2009. However, this loan had to be paid back by the homeowner.
The First Time Home Buyers Tax Credit of 2009, on the other hand, does not need to be paid back. However, it is necessary to live in the home for at least 3 years. Those that sell the home before then will have to return the money, although some exceptions may be made, such as in the case of divorce.
The 2009 Home Buyers Tax Credit can be claimed on either 2008 or 2009 tax returns. People who have already filed their 2008 taxes can file an amended tax return, which is usually processed within 8 weeks, allowing them to receive their tax credit early. While the full amount of the tax credit will be sent to those who owe nothing in taxes, including those with no income, if you have an outstanding debt with the IRS, the money will be used to pay this debt first.
When you look at the big picture, the First Time Home Buyers Tax Credit of 2009 makes up less than 1% of the $787 Billion American Recovery and Reinvestment Act Stimulus Package. However, this tax credit can be a big help to those who are buying a home for the first time.