If you bought a home in 2008 or plan to buy one in 2009, before December 1, you’ll be able to benefit from a federal income tax credit of up to $8,000. If you’re married, filing separately, you can claim up to $4,000.
The Treasury Department and the Internal Revenue Service announced the tax credit in late February and noted that tax payers no longer have to repay the money they save.
To be considered a first time home buyer eligible for this tax credit, you have to have not owned property within the past three years prior to your purchase. The tax credit begins to phase out for single tax payers at $75,000 of income; $150,000 for joint filers.
The IRS revised form 5405, First-Time Homebuyer Credit, in response to the new legislation. Visit IRS.gov for more information.
And be aware that due to the late-breaking nature of the tax credit’s extension to the 2008 tax year, your tax software may not take it into account or may not give you the full $8,000.
Feb. 25, 2009.