Hello neighbors, here are some frequently asked questions about tax credits for first-time home buyers. This information comes courtesy of Jim & Kim McPhail with Prudential in Lancaster, PA. Thanks for this valuable information, Jim & Kim!

 

What is the $8,000 Tax Credit?

The $8,000 tax credit is a credit up to $8,000 that is being offered to first time home buyers from the federal government. The amount you receive will be 10% of the purchase price of the home up to $8000.

 

Who qualifies for this tax credit?

A first time home buyer who purchases a home between January 1, 2009 and December 1, 2009. A first time home buyer is considered anyone who has not bought a home within the past three years.

 

How do you claim the tax credit?

First, make sure that you qualify for the credit. If you do, claiming the credit is easy. All that you need to do is claim the $8,000 on your federal income tax return. No special applications or forms are required.

 

What are the income limits to receive this credit?

For a single person household, the income limit is $75,000. For a two person or married household, the income limit is $150,000.

 

What if I make more than the income limit?

You may still be eligible for the tax credit, but in a scaled down form. The credit would be reduced based on how much you make.

 

Does the credit need to be paid back?

No. Unlike the $7,500 tax credit that was passed previously, this credit does not need to be repaid.

 

What if I purchased my home before January 1, 2009?

If you purchased your home between April 9, 2008 and January 1, 2009 you may still be eligible for the $7500 tax credit. This credit is basically an interest-free loan that is claimed on your federal tax return but needs to be repaid over the next 15 years. You should consult your tax professional to see if you qualify for this credit.

 

What if I already claimed the $7500 tax credit?

You cannot claim both the $7500 credit and the $8000 credit. If you purchased your home after January 1, 2009 and have already claimed the $7500 credit, you can file amended 2008 taxes with a 1040X form. Contact your tax professional for more details.

 

-Jim & Kim McPhail, Prudential Homesale Services Group, Lancaster, PA.