FAQ’s Regarding the 2009 Federal First-TimeHomebuyers Tax Credit...

The American Recovery and Reinvestment Act of 2009 was signed on February 17, 2009. The Act includes a few revisions for the First-Time Homebuyers Tax Credit.
The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

Q What is the amount of the new tax
credit?
A $8,000
Q Who is eligible for the $8,000 tax
credit?
A First time homebuyers who closed (or will close)
on homes between January 1, 2009 and November
30, 2009.
Q What are the details of the new tax
credit?
A Thenewtaxcredit isan $8,000 refundabletax credit
(orupto10%of thepurchaseprice). Thismeans that if your
total tax liability in the given year is less than $8,000 the IRS
will send a refund for the balance.
Q Do I have to pay back the credit?
A If you occupy your home for three years you will
not have to pay back the credit.
Q Who qualifies for the credit?
A •First-time homebuyers (Taxpayers who owned
a main home at any time during the three years prior
to the date of purchase are not eligible).
• Purchasers of a “main home.” i.e. principal
residence. The home must be a home located in the
United States and is generally considered to be the
home where you spend 50% or more of your time. It
can be a condo, single family detached, co-op,
townhouse or something similar. Vacation homes and
rental properties are not eligible. For new
construction, the “purchase date” is the date you
occupy the home.
Q What if I purchased a home between
April 8, 2008 and January 1, 2009?
A Purchasers who bought between 4/8/08 and
1/1/2009 are subject to the terms of the $7,500
repayable credit.
Q What are the income limits?
A The credit is reduced or eliminated for higherincome
taxpayers. Joint filers with a MAGI of $170,000
and above and single filers with a MAGI of $95,000 and
above are ineligible for the credit. Singles making
between $75,000 and $95,000 and joint filerswith aMAGI
of between $150,000 and $170,000 are in the “phase-out”
range, meaning you will only receive a fraction for the
$8,000 tax credit.
Q When/How can I claim the credit?
A It can be claimed on your 2008 tax return (to be
filed by April 15, 2009), an amended 2008 Tax Return,
or your 2009 Tax Return.
Q Who do I contact if I have more
questions about this credit?
A Contact your tax preparer, or
call the IRS toll-free at (800) 829-1040 for more
information on the tax credit. This information is
accurate based on the information available as of
February 19, 2009. As with any tax law change, check
with a tax advisor if there are any question regarding
using this provision.
courtesy, CAR