The IRS announced a special extension of the First-Time Homebuyer Credit this February, available for eligible taxpayers who purchase a home in 2009. The American Recovery & Reinvestment Act provides for a credit of up to $8,000 for anyone purchasing a home between January 1 and December 1 of 2009. Unlike previous years’ First-Time Homebuyer Credit, which was capped at $7,500 and required repayment in installments, the credit for 2009 purchases is a standard refundable credit, not requiring repayment and available regardless of the filer’s tax liability. It can be included on tax returns filed right now, and it will be available when 2009 tax returns are filed next year, as long as it is claimed on a home purchase occurring before December 1, 2009.
Any 2008 tax return claiming the credit for a home purchased between April 8 and December 31 of 2008 will still be eligible only for the previously existing credit, which must be repaid within the next several years. The new credit applying to 2009 purchases also has some of the same restrictions. The credit is equal to 10% of the home’s purchase price, with $8,000 as the new maximum amount. The amount of the credit will be lower for single taxpayers with an Adjusted Gross Income above $75,000 and joint taxpayers with an AGI above $150,000. Taxpayers who are Married Filing Separately are only eligible to receive one-half of the total credit amount, or $4,000. And while the new version of the credit, for 2009 purchases, does not require repayment, the waiving of repayment is conditional on the taxpayer maintaining ownership of the home and use of it as their main residence for 36 months from the date of purchase.
RapidTax.com currently has the First-Time Homebuyer Credit available to anyone who files a 2008 tax return through our site, in both its original form and the new form pertaining to 2009 home purchases. The amount of the credit will be calculated online, from the information provided during the submission process.