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$8,000 TAX CREDIT for First-Time Home Buyer's

The 2009 First-time Homebuyer Tax Credit allows buyers who haven't owned a home in at least three years to receive a refund up to $8,000!

First-time Homebuyer Tax Credit

By now, most consumers are aware of the changes made to the First-Time Homebuyer Tax Credit contained in the recently enacted Economic Stimulus Bill. In short, the tax credit was bumped up to $8,000 (from $7,500) and the recapture provision (a big impediment in the prior version) was removed.

Your can receive the tax credit, regardless of whether you owe taxes or are due a refund. For example:

• If you owe $3,000 in taxes and claim the $8,000 credit, you will receive a $5,000 refund.
• If you are due a refund of $1,000 and claim the $8,000 tax credit, you will receive a $9,000 refund.
• If you owe nothing and are not due a refund, but claim the $8,000 tax credit, you will receive an $8,000 refund.

The Ohio Housing Finance Agency (OHFA) on March 31 announced the Homebuyer Tax Credit Advantage program, which can assist homebuyers with downpayment and closing costs and can be used with the $8,000 tax credit. 

First-time buyers can claim $8,000 tax credit on 2008 return, even if they purchased in 2009!

First-time homebuyers can take advantage of tax credit and claim it on their 2008 tax return that is due April 15. Eligible homebuyers who make their purchase between Jan. 1, 2009 and Dec. 1, 2009 can treat the purchase as if it had occurred on Dec. 31, 2008.

In other words, if you worked with a first-time buyer who bought a home since Jan. 1 -- or are currently working with one -- they won't have to wait to claim the credit on their 2009 income tax return! In essence, eligible buyers have three filing options for their 2008 taxes:

1. If they purchase between Jan. 1, and April 15, 2009 they can claim the $8,000 credit on the 2008 return due on April 15.
2. They can extend their 2008 income-tax filing until as late as Oct. 15 (The IRS grants automatic extensions, but the taxpayer must file for the extension. See http://www.irs.gov/ for instructions on how to obtain an extension.)
3. If they have filed their 2008 return before they purchase the home, they may file an amended 2008 tax return on Form 1940X.

Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return, which is due April 15, 2010.

*The content of this article was found on The Columbus Board of Realtors website.  www.ColumbusRealtors.com