2010 Homebuyers Tax Credit

In an effort to stimulate the economy and revive the housing market, Congress has enacted legislation providing tax credits in place effective November 7, 2009, set to expire April 30^th, 2010.  Those who are a first-time homebuyer or an existing homeowner who has owned their current home for at least five years can qualify.

1. Who Can Qualify?
   1. First time Homebuyers- The purchaser or his/her spouse may not have owned a residence during the three years prior to purchase.   They can qualify for up to a maximum of $8,000 in tax credit.
   2. Existing Homeowners- Who owned their current home for at least five consecutive years within the last eight.  They can qualify for up to $6,500 in tax credit.
2. Deadlines
Must have a binding agreement date by April 30, 2010 and close on the home by June 30, 2010.


3. The tax credit does not have to be repaid.  This is a true credit; however, buyers must use the residence as their principle residence for at least three years.


4. When to Apply for the Tax Credit?
   1. Buyers purchasing homes on or before 12/31/2009 may claim the credit on their 2009 tax returns.
   2. Buyers purchasing in 2010 will have the option to:
   • Claim the credit on their 2009 return.  Form 5405 with attached HUD statement.
   • File an amended return for 2009 if their purchase is completed after April 15, 2010.
   • Claim the credit on their 2010 tax returns.