1st Time Homebuyer

2. The buyer has not owned a home in the prior three years.

* The tax credit includes newly-constructed homes.

IncomeLimits

* Homebuyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their adjusted gross income (AGI) is less than $75,000. (The price of the purchased property must be $75,000 or more to receive the full credit; otherwise the tax credit will be 10% of the sales price.)

* For married couples filing a joint return, the income limit doubles to $150,000.

* Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time homebuyer tax credit.

* Married couples filing jointly who earn between $150,000 and $170,000 are eligible to receive a partial first-time homebuyer tax credit.

* The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples filing jointly with an AGI that exceeds $170,000.

EffectiveDates for theTax Credit

* First-time homebuyers could receive a $8,000 tax credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009. To qualify, you must close on the sale of the home during this period.

Tax Creditis Refundable

* A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will send you a check for the difference.

*** For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.

*** If you are due to receive a $1,000 tax refund from the government, your refund would increase to $9,000 ($1,000 plus $8,000 from the homebuyer tax credit).

Payback Provisions

* This credit does NOT have to be repaid, however the purchaser must live in the home at least 3 years.

FIRST-TIME HOMEBUYER TAX CREDIT

As Modified in the American Recovery and Reinvestment Act

Major Modifications Italicized

February 2009 FEATURE	CREDIT AS CREATED JULY 2008 APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008	REVISED CREDIT – EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
Amount of Credit	Lesser of 10 percent of cost of home or $7500	Maximum credit amount increased to $8000
Eligible Property	Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.	No change All principal residences eligible.
Refundable	Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.	No change Purchasers will continue to receive refund for unused amount when tax return is filed.
Income Limit	Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).	No change Same income limits continue to apply.
First-time Homebuyer Only	Yes. Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.	No change Still available for first-time purchasers only. Three-year rule continues to apply.
Revenue Bond Financing	No credit allowed if home financed with state/local bond funding.	Purchasers who utilize revenue bond financing can use credit.
Repayment	Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.	No repayment for purchases on or after January 1, 2009 and before December 1, 2009
Recapture	If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.	If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
Termination	July 1, 2009 (But note program changes for 2009)	December 1, 2009
Effective Date	Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year.	All revisions are effective as of January 1, 2009

Further information regarding the tax credit may be found at www.federalhousingtaxcredit.com or www.irs.gov. This information is provided for general awareness only, and is not intended for the purpose of providing legal, accounting, tax advice or consulting of any kind. Please consult with your tax professional for complete details.