The Worker, Homeownership and Business Assistance Act of 2009 extended the deadline for qualifying home purchases from November 30, 2009 to April 30, 2010. Additionally, if a buyer entered into a binding contract by April 30, 2010, the buyer had until June 30, 2010, to settle the purchase.
Recently, Congress passed another extension allowing both first-time homebuyers and long-time residents until October 1, 2010 to close on their new homes as long as they were in a binding contract by April 30th.
A first-time homebuyer is defined as someone who has not owned a principal residence for the three years prior to the purchase. The maximum credit amount remains at $8,000.
The new law adds a new credit of up to $6,500 for “long-time residents.” Long-time residents must have owned and used the same home as a principal or primary residence for at lease five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.
For both credits, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax return for all qualifying purchases in 2010.
For homes purchased after November 6, 2009, the income limitations have been raised to $125,000 for single filers or $225,000 for joint filers. The phase-out ends at $145,000 of AGI for single filers and $245,000 for joint filers.
Other restrictions on the new credits for purchases after November 6, 2009 include:
- Dependents are not eligible to claim the credit;
- No credit is available if the purchase price of a home is more than $800,000, and/or
- A purchaser must be at least 18 years of age on the date of purchase.
If you would like any additional information regarding these credits or any other tax related issue, please contact Henssler Financial at 770-429-9166 or [email protected].