The President’s Stimulus Package may be able to help you buy your first home. Find out whether or not you qualify for the special tax credit available as part of the federal Stimulus Package.
The main thing to consider is that the program is for first time home buyers. If this is your first home purchase, there may be a tax credit available to you. If, for the past three years you haven’t owned a home, you may also qualify. Owning a vacation home or rental property doesn’t make you ineligible for the tax credit.
One question that comes immediately to mind is how much of a tax credit can you get?
The credit can be the smaller of either 10% of what the home costs, or ,000.
In order to qualify, you would have to buy the home between January 1 and December 31 of 2009.
Neither repayment nor recapture are applicable unless you have owned for fewer than 36 months.
Regardless of whether your tax paid equals the amount of the tax credit or is less, you may still get a refund equal to the maximum credit.
Modified adjusted gross income, known as the MAGI, will be used as the main determining factor of whether or not you qualify for the tax credit. For a single person, MAGI of ,000 is the qualifying number. For a married couple it would be 0,000.
There are partial credits available for those with a MAGI above these amounts up to MAGI of ,000 for singles and 0,000 for married couples. Spouses who file separately can each claim the lesser of either ,000 or 5% of the purchase price.
Changing your tax withholdings in 2009 to the amount of the tax credit may help you save for a down-payment if you intend to buy by the end of the year, but be sure of your plans because if things change and you do not buy your home by the close of 2009 the IRS will expect repayment.
There is a special situation for those with a home under construction. Eligibility is determined based on when the home is occupied.
If you close on the home during 2009 and move in before December 31, 2009, you can qualify for the credit, regardless of building starting in 2008.
A home purchased in 2009 may possibly be eligible for a credit on the 2008 tax year.