Home Owner Tax Credit Guide

Am I qualified?

You are qualified for the First Time Home Buyer Tax Credit if you never had a house in 3 years and you will purchase a new house from January 1, 2009 to November 30, 2009. If you own a house but your soon-to-be spouse doesn’t own one, your spouse can claim the tax credit for the two of you. You should also plan to live in that house for at least 3 years. You are not qualified if your income is above $95,000 if single and $170,000 if married.

How does the government give me the tax credit?

It is through refundable tax credit. When you are paying for income tax and you qualify for the first time home buyer tax credit, that $8,000 government incentive will be dedected from the the amount that you need to pay to the government. For example, if you need to pay the government $300 in income tax and you qualify for the first time home buyer tax credit, you will have a tax refund of $7,700. You will get a check for $7,700. This is a government subsidy. Unlike the 2008 tax credit, you will not pay for it. It is not a loan. It is a cash-out from the government to encourage you to buy a house this year instead of delaying it until the economy is doing good.

It’s unfair. I just bought a house last year. What can I do to get $8,000 tax credit?

If you purchased a house from April 1, 2008 to January 1, 2009, you cannot qualify for the 2009 first time home buyer tax credit. Instead, you are qualified for the $7,500 tax credit which is the older version of the 2009 program. You still have to pay this for a period of 15 years but you don’t pay it immediately. The first payment will be 2 years from the date you purchased your new house. It’s still a lot of help for you because you have 2 years to live in your house and pay for it in installment for 15 years. You’ll get the house for a cheap price and you pay for it without interest. You can’t get a loan from the bank as good as that.

Will I receive the whole $8,000?

If your home costs less than $80,000 you’ll get 10% of the cost as the tax credit. For example, if your house costs 50,000, you’ll only get $5,000. If your house costs $70,000, you’ll receive $7,000. If your house costs $80,000 or more, that’s where you get the full $8,000.

How to I claim my tax credit?

You can get your first time home buyer tax credit during the filing of your income tax return. Remember that you will not be qualified if your income exceed the maximum allowable amount. If you feel that your income is high for 2009, you can claim the credit during your filiing of your 2008 income tax.