In a continuing effort to stimulate the U.S. housing market and counter economic challenges, the homebuyer tax credit has been extended and expanded. This new legislation gives first time homebuyers more time to take advantage of the credit, and now also grants current homeowners assistance with a tax credit option.

You may qualify for one of these tax credits if you meet the following criteria:

First-time homebuyers may qualify for an $8,000 tax credit if they are buyers who have not owned a principal residence during the three-year period prior to the purchase and buy a home between November 6, 2009 and April 30, 2010.

Current homeowners may qualify for a $6,500 tax credit if they have resided in their principal residence for five consecutive years out of the last eight, and are purchasing a home to be their principal residence (“repeat buyer”), who buy a home between November 6, 2009 and April 30, 2010.

In the case of both tax credits, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit. Additionally, the buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount of the credit will be recouped on the sale.

This credit will be claimed on the homebuyer’s tax return to reduce the income tax liability. If any amount of the credit is unused, then the unused amount will be refunded by check to the home buyer.

For more information about the First-Time Home Buyer Tax Credit, please contact your Tax Professional.

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Source: National Association of Home Builders (NAHB) NAHB is providing the information on this web site for general guidance only. The information on this site does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information on this web site is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.