From The Tax Dude - Neil Johnson1. The tax credit is available for first-time home buyers only. Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit.
2. The maximum credit amount is $7,500. The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $75,000 or more.
3. The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009. Only the purchase of a main home located in the United States qualifies. Vacation homes and rental property are not eligible. For a home that you construct, the purchase date is the first date you occupy the home.
4. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
5. The tax credit works like an interest-free loan and must be repaid over a 15-year period. For example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.
Hopefully, this helps you understand the credit a little more. If you have any questions, please feel free to e-mail me directly.
Neil Johnson
The Tax Dude®
www.thetaxdude.com
taxdude@covad.net
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