Here is new info out today regarding this subject:

Tax Credits for Families
Source: National Women's Law Center http://www.nwlc.org/index.cfm

Resources for Advocates and Service Providers
· Find resources for your state, including fliers on the federal and state tax credits and payroll stuffers, in English, Spanish, and other languages.

· Four Easy Steps to Help Families Claim Tax Credits. Find out how you can use these resources to work with families.

· Toolkit for Child Care Advocates, created by the NWLC Tax Credits Outreach Campaign specifically for advocates working on child care issues.

· Toolkit for Advocates, created by the NWLC Tax Credits Outreach Campaign for all advocates.


Learn More About the Credits:

· Tax Credits Fact Sheet. Learn more about how tax credits can put money back in families’ pockets.

· Federal Tax Credits Overview. Get more information on each of the three federal family tax credits.

· Detailed Q&As on the Federal Tax Credits. Find the answers to tax filers' questions about the credits.

· State-by-State List of Child and Dependent Care Tax Provisions. Find out which states have these provisions.

· Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions This report examines tax-based approaches for financing child care at both the state and federal levels.


Spread the Word:

· Flier on the Federal Tax Credits. Download and distribute fliers on the federal tax credits available to families. These fliers are available in English, Spanish, Chinese, and Vietnamese.

· Payroll Stuffers on the Federal Credits. Reproduce and distribute these payrolls stuffers on the tax credits to employers and ask them to insert the stuffers in their employees' pay envelopes. These stuffers will educate employees about the federal credits that may be available to them.

· Using the Media to Spread the Word About Valuable Tax Credits. Use the media as a resource to reach a broad audience with critical information about family tax credits. If you need additional help working with the media, please contact the National Women's Law Center.

· Sample Public Service Announcement Script. Encourage local media outlets to run PSAs about the family tax credits.

· Sample Newsletter Article. Run an article in your organization's newsletter about the tax credits. Contact the National Women's Law Center for help in tailoring this article to reflect the tax credits available in your state.


Useful Links:

These organizations can provide you with information about outreach and tax-preparation assistance in your area.

· The National EITC Outreach Partnership

· The National Community Tax Coalition

· IRS: Free Tax Return Preparation

Source: National Women's Law Center http://www.nwlc.org/index.cfm

Joe,

You are very right.

I was hoping that I was helping to make the point you just brought up. It's ok to discuss things that we are hearing and tell our clients to research these things but to answer them straight out without direct knowledge is not a good thing to do. I am attending a seminar this weekend on this subject and can't wait. It will be nice when clear information is given out. Everything was so rushed into that there is so much confusion.

At this time, Missouri is the only state which has created a way for buyers to do this.

The Missouri program allows homebuyers to receive the federal government's $8,000 tax credit for first-time homebuyers when they close on their house, instead of waiting for their federal tax refund.

Missouri's program works by loaning the homebuyer up to 6 percent of the home purchase price, which is then used for down payment and closing costs. The homebuyer then files for the federal tax credit and uses the credit refund to pay off the loan from the state...per rueters

Some other states are trying to follow that example. So, Jack...it depends. Again, thanks for asking the question and thank you, Michael, for trying to give a thorough, thoughful answer. Depending on what your location is and what the method of applying the tax credit is, giving the immediate answer of 'no' without actual knowledge could mean someone is giving incorrect information to their client. No agent wants their buyer client coming back and asking them why they told them 'NO, the credit is only given when you file your 2009 taxes'. Also, since this whole tax/stimulus plan scene is so new to us, I don't see why it was so surprising that Jack, a licensed agent asked the question..

It's the same with the enhanced hap to include pcs situations. The initial budget was cut by a few millions. the final guidance has not been received the the USACE. Whatever benefits are/will be available are not written in stone and we shouldn't be giving definative answers on any subject unless we are 100% positive. Since some people gave answers and thought they were 100% sure at the time, we should be extra careful.

You may have some valid issues with your varied hypotheses, Terrance, but please recall your primary answer to this particular question. It was "No, the tax credit is just that. A credit given when you file your taxes in 2010 for 2009." to which I replied "Careful Terrance. I have read that the credit can be used as a down payment, but will need to find the information." in as respectful a manner as I could.

I always advise my clients to seek assistance in legal and tax matters, as I am neither a lawyer nor a tax professional. It does not disqualify me from knowing all I can to aid them, which in this 2008 vs. 2009 issue, allowed me to find the right answers for my daughter before the CPA's I queried did AND prior to TurboTax updating their website.

I shall back off then, Michael. Your link DOES show how a person can get the $8K before buying the home. You are indeed correct and I am not worthy. However, there are a lot of "what ifs" and some strict guidelines to adhere to.

1 - You MUST save the "extra" funds you are receiving. No deviation from this.
2 - You need to ensure that you actually purchase a home before the deadline.

What if you squander the "extra" take home pay? What if deals fall through? Agreements of Sale are done all the time. "Closing needs to be done by such and such date". Rarely does one ever put or think about the "what if it doesn't happen?" What are the consequences? This is such a murky area to mess around with.

If you have a buyer which has a problem with a down payment or closing costs, then you really shouldn't be working with them. This is what got people into problems the first place. No money to put down, seller's assist for closing costs, house poor. I will assist those who don't have a down payment to get assistance into getting a plan to save for that down payment. But I will highly suggest to any buyer I have against purchasing a home if they do not have at least 10% down and money for closing costs or if their payments would be at the top end of what they can afford.

But hey, if you want your people to mess with the IRS, go ahead and advise them that way. But you have to think. Is this REALLY in the best interest of your clients?

Terrence

First-time Homebuyers' Credit: An IRS news release describes the options available to qualifying taxpayers who purchase a home before 12/1/09: (1) taxpayers who haven't yet filed their 2008 return but are buying a home soon can request a six-month extension to claim the credit on the extended return; (2) taxpayers due a sizable refund on their 2008 tax return but who also are considering buying a house in the next few months can file their return now and claim the credit on an amended return later this year; (3) taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return; or (4) taxpayers can claim the credit next year when they file the 2009 tax return if they may qualify for a higher credit on the 2009 tax return. News Release 2009-27.

Terrance, since this is a public forum and we, the real estate profession, are representing ourselves as professionals to provide information for what will likely be the forum's guests largest investment,, I choose not to trade zingers with you on my replies. If I write it here, as a statement of fact, you can be assured it is accurate. If I write it as an opinion, it will be just that. Regardless of the tax program used, or accounting skill level of the tax preparer, you, as a first time home buyer, may elect to take the tax credit against last year's income. Period. The link provided answers this in FAQ 21. To wit:

For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

As far as your last post is concerned, you are still WRONG since you may choose to either file taxes, buy a home, and then file an amended return to claim against last year's income, or simply file an extension, pay what you owe, buy a home and then claim.

Now, for what was written I read about using the tax credit as a down payment, here is the link from NAHB.

http://www.nbnnews.com/NBN/issues/2008-08-18/Front%2BPage/3.html

Good luck with that batting average.

Joe the Builder,

OK, I read the link. But in order to receive the credit in 2009, you must have already BOUGHT the home. You can't be "planning" on getting a home, "claim" the tax credit and then buy the home. This is downright wrong. What if something happens and the deal falls apart for some reason? Now you have an extra $8K and now home to show for it. All the link shows is how people can get the tax credit this year instead of next, not how to use it as a down payment.

The ONLY way you can use the tax credit as a down payment is if you purchase a second home/property. You get the first property, get your tax credit this year or next (whenever), buy your second property.

If there is an actual way to get the credit "before" you get the home, then please tell me. I would love to pass this info out.

Terrence Charest, e-Pro

Jack,

If your clients need the money asap, I would that they check to see if they can file an amended tax return for last year and get the credit early instead of waiting to file it on this years taxes. I imagine that there are restrictions and timelines but they can check with the irs on that.

I think Michael's answer was better thought out. I don't think he was talking about people that bought in 2008 and qualify for the 7500, this is regarding people who bought already in 2009 and can amend their taxes. His warning to 'be careful' was absolutely correct. Giving flat out tax advice that is incorrect is why we shouldn't be giving flat out tax advice in the first place. What we can do is research what is going on and be informed enough to share with out clients the questions and benefits they may want to check into.

I don't know why people jumped all over you or got sarcastic. We are not tax experts and, as you can see from the different posts, there is a lot of different view one the guidelines. We're not out there giving tax advice, just wanted to know what suggestions we can make for our clients and trying to keep up to date so we can help our clients ask the right questions.

Joes national home builders link, although helpful, is not an official irs link so please cross reference information with the official link.

Depending on what state you are in and what the circumstances, there are a few programs we've seen referenced that explain how to use the tax credit as a down payment. Bottom line, Jack, if you are trying to represent your buyers, don't assume any answer here as being 100% accurate since there are some states looking into short terms loans of the tax credit for buyers and a payroll deduction program that can be applied to the down payment. Research what you can and direct your buyer to the correct point of contact AND thank you for asking that question since it obviously brought up some clearly different answers!

Michael,

You mean to tell me that Turbo Tax (the same program our friend Tim Geitner used) has the $8000 2009 tax credit being given to folks filing their 2008 taxes? Hmmmm....my TaxCut program only showed the $7500 tax credit which was repayable.

Wow... I've been using the wrong program this whole time.

Terrence Charest, e-Pro

The reason I asked is because I have read on various websites that people are doing it Joe. And because I am a licensed Realtor, I want to know all the answers for my clients.

Careful Terrance. I have read that the credit can be used as a down payment, but will need to find the information. As far as your answer's end, however, you definitely may elect to use the tax credit against your 2008 income. TurboTax has allowed it for my daughter's 2008 filing, for what it's worth.

Terrance is correct! If you need 100% look st USDA

No, the tax credit is just that. A credit given when you file your taxes in 2010 for 2009.

Terrence Charest, e-Pro