Time is running out to qualify for the

$8000 First-time Homebuyer Tax Credit

Many taxpayers who purchase a home this year will qualify for an $8,000 federal tax credit. The refundable first-time homebuyer credit is a major tax provision which has been extended through April 30, 2010, with two months to close. Here are a few things the IRS wants you to know about the credit:

The credit is either 10 percent of the purchase price of the home or $8,000, whichever is less. 

You (and your spouse, if married) must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.

An eligible homebuyer must enter into a binding contract to purchase a principal residence on or before April 30, 2010 and close no later than June 30, 2010. For qualifying purchases in 2010, homebuyers have the option of claiming the tax credit on either their 2009 or 2010 tax return. The tax credit would be extended until June 30, 2011 for servicemen and women serving overseas for at least 90 days.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint tax filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

The credit is fully refundable. A homebuyer with no taxable income, who qualifies for the credit, may file for the sole purpose of claiming the credit and receiving a refund. The credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

Contact us for more details on the extended tax credit. (336)413-0288.