The homebuyer tax credit was officially extended and expanded yesterday, Nov. 6, 2009, when the President signed the new legislation into law.  Now, if you’re eligible, you must buy or enter into a contract to buy your primary residence on/before April 30, 2010 and close by June 30, 2010.  Some of the provisions appear to be the same as before:

• The credit is the smaller of $8000 or 10% of the purchase price.  So, if the price of your home is $60,000, the most you could receive would be $6000.
• Your modified adjusted gross income (the amount of income that’s reported to the IRS after allowable adjustments) must be $75,000 or less ($150,000 or less if married filing jointly) to receive the full credit.  If your adjust gross income is between $75k – $95k (or $150k – $170k for married filing jointly), then you may receive a portion of the credit.  The income limits have been raised for homes purchased after Nov. 6, 2009 – see below for more details.
• From the date that you purchase the home, you must live in it as your main home for the next 3 years or you will have to pay the credit back to the government.  Please note the use of “main home” – the government defines this as the home you live in most of the time.  If you have more than one home and only live in one a few weeks or months out of the year, that one would not be your main home.

Now under the new law:

• The modified adjusted gross income limit for individuals has been raised to $125,000 ($125,000 – $145,000 may receive partial credit) and $225,000 for joint filers ($225,000 – $245,000 may receive partial credit).
• Long-time homeowners that buy a new primary residence to replace their current one may claim up to $6,500 (up to $3,250 for married filing separately)! To qualify, you must have lived in the same principal residence for any five consecutive year period during the eight years prior to the date the replacement home is purchased.  No details yet as to whether this only applies to homes purchased after Nov. 6, 2009, or if it includes home purchased earlier in 2009.

We’ll post more details as the government provides updates.  Source of info: http://www.irs.gov/newsroom/article/0,,id=204671,00.html

For informational purposes only.  Although we try to provide reliable info, we do not guarantee that posts always have the most updated details.  Please consult with a tax professional or financial advisor for more details and to see if you can and should file for the credit.  The IRS is also available to answer any tax related questions you may have – the number to call for individual taxes is 800-829-1040.