2009 First-Time Home Buyer Tax Credit Fact Sheet
Who is Eligible
• The $8,000 tax credit is available for first-time home buyers only.
• The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
• All U.S. citizens who file taxes are eligible to participate in the program.
Payback Provisions
• The tax credit is a true credit. It does not have to be repaid.
• The only repayment requirement is if the home owner sold the home within three years after the purchase.
Income Limits
• Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $75,000.
• For married couples filing a joint return, the income limit doubles to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
• Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
• The credit is not available for single taxpayers whose MAGI is greater than $95,000 and married couples with a MAGI that exceeds $170,000.
Effective Dates for the Tax Credit
• First-time home buyers would receive an $8,000 tax credit for the purchase of any home on or after January 1, 2009 and before December 1, 2009. To qualify, you must actually close on the sale of the home during this period.
Tax Credit is Refundable
• A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.
• For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.
• If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit).
• Buyers can take the tax credit on their 2008 or 2009 income tax return.
Types of Homes that Qualify for the Tax Credit
• All homes, whether single-family, townhomes or condominium apartments will qualify, provided that the home will be used as a principal residence and the buyer has not owned a principal residence in the prior three years. This also includes newly-constructed homes.
For more details on the tax credit, go to www.federalhousingtaxcredit.com
There are also a number of credits available for existing homeowners.
Energy Star Tax Credits for Existing Home Owners:
On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits. The highlights are:
• Tax credits on 30% of cost, up to $1,500.00 for metal and asphalt roofing !!!
• Tax credits on 30% of cost, up to $1,500.00 for adding additional insulation to your home !!!
• Tax credits on 30% of cost, up to $1,500.00 for replacing windows, skylights and exterior doors !!!
• Tax credits on 30% of cost, up to $1,500.00 for new central air conditioning !!!
• Tax credits on 30% of cost, up to $1,500.00 for replacing your existing furnace !!!
• Tax credits on 30% of cost, up to $1,500.00 for replacing your existing water heater !!!
• Tax credits on 30% of cost, up to $1,500.00 to install a biomass stove. Note: Biomass typically includes units that burn wood, corn, pellets, etc. Please visit energy star’s website for additional information.
• Tax credits on solar energy systems 30% of cost (no limit) !!!
• Tax credits on geothermal heat pumps 30% of cost (no limit) !!!
• Tax credits on small wind energy systems 30% of cost (no limit) !!!
• Tax credits on fuel cells 30% of cost (no limit) !!!
• Tax credits on certain hybrid cars (Please refer to the Energy Star website for additional information) !!!
Important Note: If you are thinking about participating in any of the tax credits above, it is VERY IMPORTANT that you refer to the Energy Star website for qualifying details and information. The tax credits apply only to specific products that meet the highest energy standards. For example, in order for shingles to qualify for this tax credit, they MUST be Energy Star rated shingles!
Tax credits are now available for home improvements:
• must be "placed in service" from January 1, 2009 through December 31, 2010
• must be for taxpayers principal residence
• maximum amount is $1,500 in 2009 and 2010 for most home improvements (geothermal heat pumps, solar water heaters, solar panels, fuel cells, and windmills are not subject to this cap, and are in effect through 2016)
• must have a Manufacturer Certification Statement3 to qualify
• for record keeping, save your receipts and the Manufacturer Certification Statement3
• improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010
• If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters.
For additional information please visit http://www.energystar.gov and click on the “Tax Credits for Energy Efficiency” in the lower left hand side of the page.
Additional tax credit information is available to download in .PDF format by clicking on the following links:
First-time home buyers
Existing homeowners
Hombuyer tax credit $7500 brochure
Homebuyer tax credit update frequent asked questions