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If you’re an eligible federal employee or qualified military personnel, you have 3 weeks from this Saturday to use the federal home buyer tax credit, and to claim up to $8,000 in federal income tax credits.

According to the IRS, eligible persons include members and spouses of the uniformed services, members and spouses of the Foreign Service, and intelligence community employees who served at least 90 days of qualified, extended duty service outside of the United States between January 1, 2009 and April 30, 2010, and their spouses.

Eligible persons must be under contract for a new home on or before April 30, 2011, with the home’s closing occurring on or before June 30, 2011.

The federal home buyer tax credit is a true credit, too. Eligible buyers receive a dollar-for-dollar tax reduction equal to 10 percent of the subject home’s purchase price, not to exceed $8,000 for first-time home buyers, and not to exceed $6,500 for repeat home buyers.

Repeat buyers must have lived in their “main home” through 5 of the last 8 years in order to be eligibke.

Furthermore, both the buyer(s) and the subject property must meet certain minimum eligibility requirements:

• The home may not be purchased from a parent, spouse, or child
• The home may not be purchased from an entity in which the seller is a majority owner
• The home may not be acquired by gift or inheritance
• The home sale price may not exceed $800,000
• Buyers may not earn more than $125,000 as single-filers; $225,000 as joint-filers

The complete program description is published on the IRS website.

For additional information regarding your tax credit eligibility, you may want to speak with an accountant or other tax professional. It’s often worth the cost.

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The $8,000 First Time Homebuyer Tax Credit and $6,500 repeat homebuyer tax credit has been extended for Military, Foreign Service and Intelligence Community personnel through April 30, 2011, as long as you go under contract by that date and close by no later than June 30, 2011.

This is great news, and it’s proof that Congress understands the pressing demands and situation faced by members of the military, the foreign service and the intelligence community.   In addition to this extension, Congress has lifted some of the other key rules pertaining to these tax credits.

Paying Back Your Homebuyer Tax Credit

Normally, you have to repay the tax credit if you sell your home or your home ceases to be your primary residence  within three years of the initial purchase.  However, qualified service members required to move for extended duty purposes will not have to repay the tax credit.

Definition of “Qualified Service Member” and “Official Extended Duty”

It’s important to remember two key definitions where this first-time homebuyer tax credit extension is concerned.   “Qualified service member” refers to a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.

The term “Official extended duty” refers to any period of extended duty outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.

Technorati Tags: First-Time Homebuyer Tax Credit Extension, Homebuyer Tax Credit Extension 2011, Military Personnel Tax Credit Extension

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Florida mortgage borrowers received some great news regarding the First-Time Home Buyer Tax Credit extension.  Congressional members not only voted to extend, but they also expanded the credit, and the White House is expected to sign in the extension into law later today.

The expiration date for the new version of the First-time home buyer tax credit has been moved forward to the spring of 2010 – with home buyers in Florida and across the country required to be under contract by April 30, 2010, and to be closed by June 30, 2010.

For the most part, Florida mortgage borrowers can expect similar requirements as were part of the last tax credit:

• Buyers may not purchase their home from a spouse, parent, or child
• Buyers are not permitted to purchase the home from an entity in which they are listed as a majority owner
• Buyers may not receive the home through either a gift or inheritance
• All parties to the purchase must meet eligibility requirements

Important Updates to the New First-Time Home Buyer Tax Credit

Florida mortgage borrowers should note that there are a few new wrinkles in this latest iteration of the tax credit.  First, the definition of “first-time home buyer” has been expanded to include most homeowners with at least 5 years in their current home.  This is great for “Move-up” home buyers in Florida, as they can now stake a claim up to for a credit with the IRS of up to $6,500.

Other eligibility changes Florida mortgage borrowers need to be aware of include:

• The subject property sales price may not exceed $800,000
• The subject property must be a primary residence
• Income limitations have been raised to $125,000 for single-filers and $225,500 for joint-filer

And remember, folks -  this First-Time Home Buyer program provides Florida mortgage borrowers and other home purchasers with a true tax credit – not a deduction.  This means that you, as a tax filer will receive a cash payment of $2,000 from the U.S. Treasury if your “normal” tax liability totals $6,000 and you are eligible for all $8,000 available under the new law.

The complete list of qualifying criteria is posted on the IRS website.  Be sure to review it with a tax professional to determine your eligibility.  Then mark your calendar for April 30, 2009.

It’s 5 months away.

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Florida first-time home buyers are in a great position right now, thanks to the $8,000 First-Time Home Buyer Tax Credit.  If you’re considering a home purchase between now and November 30, 2009, and you plan to live in your Florida home for 3 years or more, then you simply must take advantage of this true $8,000 Tax Credit.

I’ve pulled together some answers to five of the most frequently asked questions (FAQs) concerning the First-Time Home Buyer Tax Credit.  I hope you find them useful:

Who Qualifies for the $8,000 First-Time Home Buyer Tax Credit?

You are eligible to receive this tax credit so long as you adhere to the following:

• You have never owned a home – or, have not owned one in the past 3 years – determined by HUD 1 date when previous home was sold (Note: If married and you did not own a home within the last 3 years, but your spouse did, then you do not qualify)
• You have or will buy your home as a primary residence between January 1 and November 30, 2009
• You can show that if you owned a rental property or vacation home, it was not used as a primary residence over the last 3 years
• If you’re unmarried and you are buying the home with another person who owned a home within last 3 years but you did not, you can “designate” the tax credit to you – qualifying you as the First Time Home Buyer (FTHB)
• If your parents cosign on a mortgage (and own a home) and you are the FTBH, then you are eligible for the tax credit.
• Non-US Citizens may qualify if they meet resident-alien status (IRS Pub 519)
• Revenue or Housing Bond financing are eligible for tax credits.

What Types of Properties are Eligible for the Tax Credit?

• Primary Residence – Single family, 2-4 units (must occupy one unit) town homes, condos, manufactured homes, mobile homes and houseboats.  Yes, houseboats!
• For new construction – The “Purchase Date” is the date that you begin to occupy the home (between Jan 1 and Nov. 30, 2009) Note: You can have owned land and be in the process of building.

What Income Limits Are Associated with the Tax Credit?

• $75,000 Single Person (Partial Credit up to $95,000)
• $150,000 Married Couple (Partial Credit up to $170,000)
• Totals are based on Adjusted Gross Income (AGI) line on IRS Form 1040, 1040A or 1040EZ

What Exact Amount is Awarded via the Tax Credit?

• You may be eligible to receive a maximum of $8,000, or the amount equal to 10% of home’s sales price – up to this amount. If you buy for $75,000, then you are eligible for only $7,500.
• Up to Maximum of $8000
• Partial Tax Credit if income exceeds $75,000 or $150,000

Does the Tax Credit Have to be Repaid?

• No.  As long as you stay in the home for a minimum of 3 years, you do not have to pay back the tax credit.
• Note: If you sell within 3 years, the entire tax credit needs to be repaid!

Need to apply for the First Time  Home Buyer Tax Credit? Be sure to download and complete IRS First-Time Home Buyer Credit Form 5405.

As always, you need to consult with your tax professional regarding how this tax credit will impact your finances.  That said, if you’re planning to buy a Florida home in the near future – or any time up through November 30, 2009 – taking the $8,000 First Time Home Buyer Tax Credit is a no-brainer!

Have any other questions regarding this issue?  Comment here, and I’ll do my very best to get back to you ASAP!

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