First Time Home Buyer Tax Credit - Up to $8K!
President Barak Obama signed the American Recovery and Reinvestment Act of 2009 into law on February 17, 2009. The Act provides for a “first-time home buyer” tax credit. Below is a series of FAQs regarding the credit:
1. Does the tax credit apply to manufactured homes?
YES!!! Any home that is the buyer’s principal residence will qualify for the credit. Mobile homes placed on both private and in land-leased communities are eligible.
2. Who is eligible for the tax credit?
A first-time home buyer who purchases a principal residence between January 1, 2009 and December 1, 2009. The purchase date is defined as the date when closing occurs and the title to the property transfers to the home owner.
3. What is the definition of a first-time homebuyer?
A first-time home buyer (FTHB) is a buyer who has not owned a principal residence during the three-year period prior to the current purchase. For married taxpayers, the law reviews the homeownership history of both home buyer and his/her spouse.
4. How much will I get?
FTHBs are entitled to a tax credit equal to 10% of the home’s purchase price, up to a maximum of $8,000. For instance, a mobile home purchased for $45,000 will qualify for a $4,500 tax credit.
The tax credit will be a reduction in what the FTHB owes to the IRS on his/her 2009 income tax return. If the FTHB owes the IRS $500 on April 15th, but qualified for a $4,500 FTHB credit, the IRS will refund the taxpayer the difference of $4,000.
5. How do I claim the tax credit?
FTHBs should complete IRS Form 5405 to determine their tax amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary.
6. Are there income limits for individuals claiming the tax credit?
Yes. For single tax payers with a modified adjusted gross income over $75,000, the credit is reduced proportionally using a phase-out. For married taxpayers filing a joint return, the reduction begins at a modified adjusted gross income of $150,000.
*Please contact the Mobile Loan Specialists Team if you have questions about the tax credit. We recommend you consult a tax professional to calculate the exact amount you are eligible to receive.