First-Time Home Buyer Tax Credit

Part of the recent Stimulus bill President Obama just signed included an increase in the tax credit for first-time home buyers. The amount of the tax credit is the lesser of 10% of the cost of the home or $8000 (the old limit was $7500). However, the big difference is that unlike the previous credit that needed to be paid back, this one does not. The home must be purchased between January 1, 2009 and December 1, 2009.

There are some conditions though.
- You must be a first-time home buyer
- The property must be your primary residence
- You are eligible for the entire credit if your adjusted gross income is at or below $75,000 (individually) or $150,000 (filing jointly). If your gross income is between $75,000-95,000 (individually) or $150,000-170,000 (filing jointly), you may not receive the entire credit. Should your adjusted gross income exceed $95,000 (individually) or $170,000 (filing jointly)you are not eligible for this credit.
- You must remain in the home for at least 3 years. If the home is sold within 3 years of the purchase, the entire amount of the credit is recaptured on the sale.