Here are the highlights of the Federal Tax Credit for home buyers:
Amount of Tax Credit - 10% of purchase price not to exceed $8,000.
Principal Residence - Property purchased must be the taxpayer’s principal residence which is generally the home the taxpayer lives in most of the time (26 U.S.C. § 121).
Type of Property - House, condominium, townhome, manufactured home, apartment cooperative, houseboat, housetrailer, or other type of property located in the U.S.
First-time Homebuyer - The buyer (and buyer’s spouse if any) must not have owned a principal residence during the three-year period before date of purchase.
Unoccupied Property - Property may have been previously occupied or not.
Minimum Occupancy Requirement - Must be the buyer’s principal residence for 36 months after purchase, otherwise credit must be repaid.
Income Restriction - Tax credit begins to phase out if modified adjusted gross income is over $75,000 (or $150,000 for joint filers). No tax credit at all if modified adjusted gross income is over $95,000 (or $170,000 for joint filers).
Date of Purchase - January 1, 2009 to November 30, 2009, inclusive. (Note: A repayable $7,500 tax credit is available for purchases from April 9, 2008 to December 31, 2008.)
Refundable - Any amount of the tax credit not used to reduce the tax owed may be added to the taxpayer’s tax refund check.
Repayment - The buyer need not repay the tax credit if the buyer owns and occupies the property for at least 36 months after the purchase.
Multiple Buyers (not married to each other) - The $8,000 tax credit may be allocated between eligible taxpayers in any reasonable manner.
When to Claim - Full tax credit may be claimed on 2008 or 2009 tax returns.
How to File - (IRS Form 5405) to be filed with 2008 or 2009 tax returns
When to File Form - Form 5405 must be filed with 2008 or 2009 tax returns.
Exceptions - Acquisitions by gift or inheritance, acquisitions from related persons as defined, and buyers who are nonresident aliens.
For more information go to IRS website