My ears definitely perked up when I heard about the stimulus measure giving homebuyers an $8,000 tax credit. I immediately had a bunch of questions, like could I buy this year and count it for my 2008 return? If I paid less than $8,000 in taxes can I still get the full amount? Is it really a credit or, like so many things, is it actually a loan?
To see my answer
Savvy says: Because there have been so many questions surrounding this issue since it was included in early stimulus proposals, the best way for me to answer is to give you a breakdown of the facts. Here's what you need to know about the homebuyer credit that was signed into the economic stimulus bill yesterday.
- First-time buyers can claim a credit worth $8,000 or 10 percent of the home's value, whichever is less.
- The amount can be claimed on your 2008 or 2009 tax return. If you already filed your 2008 return, simply file an amendment.
- To qualify as a first-time buyer in this scenario, you must not have owned a home for the last three years.
- The purchase must be made between Jan. 1, 2009 and Nov. 30, 2009.
- You'll only have to pay back the $8,000 credit if you live in your new home for less than three years.
- If you make more than $75,000 as a single person or $150,000 as a couple, you won't qualify for the full credit.
- The question isn't how much you paid in taxes, but whether you owe or will receive a refund. Either way, you'll get the $8,000: If you owe money that amount will be deducted from the $8,000, and if you're getting a refund that amount will simply be added to the $8,000.
- Unlike an earlier version of the measure that was rejected, this is actually credit — it is not a loan.