Monday, November 16, 2009

Expanded Tax Credit

Provisions of the new tax credit include:

• Extends the $8,000 first-time Homebuyers Tax Credit and creates a new $6,500 tax credit for
other qualifying buyers.

• Homebuyers with building contracts as of April 30 qualify for the credit so long as they close
the transaction by July 1.

• Available to homebuyers with incomes of up to $125,000 for a single return or $225,000 for a
joint return, with a phase-out on income up to $20,000 higher.

• Not available for homes costing over $800,000.

• Homebuyers who owned a home in the previous three years are eligible if the home they are
leaving has been used as a principal residence for five consecutive years in the last eight.

• Provides authority to the IRS to provide greater oversight while processing the return and
requires that the taxpayer claiming the credit be 18 or older and fully document qualification.

• Members of the military, military intelligence and foreign service who have been deployed
overseas for 90 days or more in 2008 or 2009 can claim the credit through April 30, 2011.

Eric P. Egeland