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As the Homebuyer Tax Credit has expired for most of the population there are some that receive a year extension. Congress has acknowledged the unique circumstances affecting members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time homebuyers and the $6,500 tax credit for repeat homebuyers.
Extension of Tax Credit Deadlines
For the qualified members of the military who are ordered on a period of official extended duty, these dates are extended for one year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.
A person that is forced to return to the U.S. for medical reasons before completing an assignment of at least 90 days of qualified official extended duty outside of the United States may qualify for the one-year extension.
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In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer's principal residence after December 31, 2008, in connection with government orders received by the individual (or the individual's spouse) for qualified official extended duty service. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer's principal residence (whether inside or outside the U.S.) or while residing under government orders in the government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
Both spouses are not required to be overseas for the requisite time period in order to claim the credit. |
$8,000 First-time Homebuyer Tax Credit at a Glance
• The $8,000 tax credit is for first-time homebuyers only. For the tax credit program, the IRS defines a first-time homebuyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
• The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
• The tax credit applies only to homes priced at $800,000 or less.
• The tax credit now applies to uniformed members of the military for sales occurring on or after January 1, 2009 and on or before April 30, 2011. However, in cases where a binding sales contract is signed by April 30, 2011, a home purchase completed by June 30, 2011 will qualify.
• For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
• For homes purchased after November 6, 2009 and on or before April 30, 2011, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
The $6,500 Move-Up / Repeat Homebuyer Tax Credit at a Glance
• To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
• The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
• The tax credit applies only to homes priced at $800,000 or less.
• The credit is available for uniformed members of the military for homes purchased after November 6, 2009 and on or before April 30, 2011. However, in cases where a binding sales contract is signed by April 30, 2011, the home purchase qualifies provided it is completed by June 30, 2011.
• Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
*Everyone's situation is different. Please consult your tax professional or attorney to determine your eligibility. Click here to view information on www.irs.gov.
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