If you purchased a home on or before April 30, 2010 you will need to close your purchase on or before June 30, 2010 to recieve the credit. A bill has been submitted to extend the date, but as of June 16, 2010, closings will need to be completed by the end of June.
To qualify income is limited to $125,000 for single filers and $225,000 for married couples filling jointly, however a partial credit is available to those exceeding the above limits by up to $20,000.
The credit is not just for first time homebuyers. There is a $6,500 tax credit available for those purchasing a new primary residence if they have lived in their previous home for any five of the previous eight years.
The tax credit is a direct dollar for dollar reduction in your taxes. This means if you owe no taxes, the government will send you a check for the entire amount of the credit. According to Brian Clinger with Coldwell Banker AJS Schmidt 40% of purchases made in the first four month of this year where stimulated by this tax credit.
Your credit can be claimed by amending your 2009 tax return. IRS Form 5405 is used to calculate the credit. The amount is then applied on line 69 of your 2009 1040 income tax form. To receive the credit, you will also need to include a copy of the HUD-1 settlement statement form, provided them by the closing title company, as proof of their purchase.
Clinger says" the new credit is benefiting both new and existing sellers who qualify whether they are down sizing, making a lateral move, or taking advantage of what continues to be an outstanding move up market. Some frequently asked questions