1. It’s not a loan.
Unlike the $7,500 tax incentive that was offered in 2008, the 2009 tax credit does not have to be paid back if the homebuyer stays in the home for more than three years. The amount of credit that they are eligible for (up to $8,000) can be put toward home improvements or be spent any other way the homebuyer chooses once the credit is received. The tax credit is subject to income limitations and other qualifications, so homebuyers should consult a tax professional to find out all the details.
2. Claiming the Tax Credit is Simple.
No applications or pre-approvals are necessary to take advantage of this opportunity- homebuyers just claim the tax credit on their federal income tax return. After the amount that the homebuyer is eligible to claim is determined on IRS Form 5405, that amount is simply entered on line 69 of their 1040 income tax return forms. One thing to keep in mind, however, is that this credit can not be claimed for a future purchase; it must be claimed for a finished transaction that closes by November 30, 2009.
3. The Tax Credit may be accessed before the 2009 tax return is filed.
If a homebuyer believes that they will qualify for the tax credit, they have the option of reducing their income tax withholding up to the amount of the credit by making arrangements with their employer or human resources department. The homebuyer will then be able to accumulate cash to contribute to their down payment.
# posted by
Anna-Lise Troup @ 11:45 AM