Update for 2009: On February 17, 2009 President Obama signed into law the American Recovery and Reinvestment Act of 2009. The new law extends and enhances the 2008 tax credit put in place to encourage home sales. The new credit gives first-time homebuyers a temporary refundable tax credit equal to 10 percent of the purchase price of a home up to $8,000 ($4,000 for married individuals filing separately) The credit begins to phase out for higher-income taxpayers. Initially, the 2008 credit was effective for homes purchased on or after April 9, 2008, and before July 1, 2009. The new law extends the credit through November 30, 2009. Moreover, the new law eliminates the repayment requirement for homes purchased after December 31, 2008 and before December 1, 2009. This is a significant enhancement. Additionally, for homes purchased in 2009, the IRS will allow a taxpayer to amend their 2008 return to claim the credit, rather than having to wait until their 2009 return is filed. However, there is a recapture provision for disposing of the home, or no longer using it as a principal residence, within 36 months of purchase.
To determine if you might qualify for this credit or for additional information please contact one of our offices.