FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Shaded
CREDIT AS CREATED JULY 2008
APPLIES TO ALL QUALIFIED PURCHASES ON OR AFTER APRIL 9, 2008
REVISED CREDIT â€“
EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
Amount of Credit:
(08) Lesser of 10 percent of cost of home or $7500
(09) Maximum credit amount increased to $8000
(08) Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence.
(09) No change All principal residences eligible.
Reduces (or can eliminate) income tax liability for the year of purchase.
(08)Any unused amount of tax credit refunded to purchaser.
(09)No change --Purchasers will continue to receive refund for unused amount when tax return is filed.
(08) Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return).
Phases out above those caps ($95,000 and $170,000).
(09) No change -- Same income limits continue to apply.
First-time Homebuyer Only
(08)Yes. Purchaser (and purchaserâ€™s spouse) may not have owned a principal residence in 3 years previous to purchase.
(09)No change - Still available for first-time purchasers only. Three-year rule continues to apply.
Revenue Bond Financing
(08)No credit allowed if home financed with state/local bond funding.
(09)Purchasers who utilize revenue bond financing can use credit.
(08) Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.
(09) No repayment for purchases on or after January 1, 2009 and before December 1, 2009
(08)If home sold before 15-year repayment period ends, then outstanding balance of repayment amount (09)recaptured on sale. If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
(08) July 1, 2009
(09) December 1, 2009
(08) Purchases on or after April 9, 2008 and before January 1, 2009. Repayment to begin for 2010 tax year.
(09)All revisions are effective as of January 1, 2009
This legislation is so new that I don't think anyone here has seen much more on it than you have. We are also not tax advisers and your question is very specific. I think you are going to have to get advice from a tax adviser, since I would hate to have you make such a big purchase and have incorrect information.
On the one hand, you don't have to be on the title, you could be just on the mortgage. But I am not sure how they will treat you as being unmarried when you bought it but married when you file your taxes. If you waited to get married until after Jan 1, maybe there would be no issue. But I am not a tax expert and I really have no idea how it will be handled.
Very interesting scenario though! People will definitely be looking for creative ways to access this money.