Things You Need To Know About The First Time Home Buyers Tax Credit Extension

Published On: November 16, 2009

1st Time Home Buyer Credit Amount: $8,000 ($4,000 married filing separate)

Current Homeowner Credit Amount: $6,500 ($3,250 married filing separate)

Definition of 1st Time Home Buyer:  May not have had an interest in a principal residence for 3 years prior.

Definition of Current Homeowner Credit: Long-time homeowners who buy a replacement principal residence.  Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years. 

Limitation on Cost of Purchased Home:  $800,000 max

Credit Ends on April 30, 2010.  Note:  Must be under contract by April 30, 2010 and closed by June 30, 2010 .

Income Limits:  $125,000 single and $225,000 married.  The credit phases out for individual taxpayers with modified adjusted gross income between $125,000 and $145,000 or between $225,000 and $245,000 for joint filers.  

Credit is claimed using Form 5405.