$7500 Tax Credit For First Time Home Buyers

Amount of Credit -Ten Percent of the cost of home, not to exceed $7500

Eligible Property -Any single-family residence (including condos) that will be used as a primary residence.

How Credit is Obtained -Reduces income tax liability for the year of purchase. Claimed on tax return for that tax year. Individuals should consult a professional tax advisor for exact tax calculations.

Examples:
If an individual’s actual tax liability was $5,000, then after the tax credit is applied the purchaser would receive a total refund of $2,500. The refundable amount is the difference between the $7,500 tax credit and the amount of one’s tax liability. If an individual’s actual tax refund was $2,000, then after the tax credit is applied the purchaser would receive a total refund of $9,500.

Income Limit -Individuals whose Form 1040 filing status is single (or head of household) are eligible for the tax credit if their income is no more than $75,000. Individuals who file a joint return may have no more than $150,000 in income. Individuals with incomes between $75,001 and 94,999 (single) or $150,001 and $169,999 (joint returns) are eligible for a partial tax credit. Individuals with incomes greater than $95,000 (single) or $170,000 (joint return) are not eligible for this tax credit.

First-time Homebuyer Only -Purchaser (and purchaser’s spouse) may not have owned a principal residence in three years previous to purchase.

Effective Date -Purchases on or after April 9, 2008 until July 1, 2009