American Recovery and Reinvestment Act of 2009
a.k.a. The Stimulus Act..
 
$8,000 First Time Home Buyers Tax Credit
Expires, December 1,2009

The $8,000 First time Home Buyer tax
credit is available to first time homebuyers
who purchase a home before December 1
of this year. In an effort to make the effects
of the credit felt quickly in the economy,
homebuyers can claim the credit either on
their 2009 tax return.

The tax credit represents 10 percent of the
purchase price of a home up to a maximum of $8,000 First time Home Buyer tax credit for married taxpayers filing separate returns.   The
2008 $7,500 credit that was authorized under
earlier legislation last year was actually a 15 year loan; the new tax credit does not have to be repaid by the homeowner under ordinary circumstances.

The credit does have to be repaid if the homeowner sells the home in less than 36 months or if the home ceases to be his principal residence during that time.

For the purpose of this credit, a first time homeowner is defined as one who has not owned a home for the 36 months ending on the date of purchase.

The credit is available to taxpayers with adjusted gross incomes up to $75,000 or $150,000 for married taxpayers filing jointly.  Above those income levels the credit is phased out gradually.

Homeowners who purchased a house between April 8 and December 31, 2008 are not eligible for the new credit.  They are covered by the earlier legislation and can claim the $7,500 repayable credit.

Treasury Secretary Tim Geithner said in a press release from his department, "The expansion of the first-time home buyer tax break as part of the President's recovery agenda gives money to taxpayers when they need it most, while also targeting an important group of buyers.  We view our economic recovery plan, our financial stability plan, and now this homeowner affordability plan as three legs of the same stool - an integrated whole that represents our immediate response to the current crisis."

Forms and instructions for claiming the credit on 2008 tax returns are available at http://www.irs.gov.  The form number is 5405.