By Johnny Jackson
Tax officials are reminding potential homeowners of the approaching deadline for requesting the First-time Homebuyer Credit.
"Now is the time to act for qualifying Georgians who are considering purchasing a home," said Mark Green, a spokesman for the Internal Revenue Service (IRS).
Green said home buyers will have until Dec. 1 to apply for the First-time Homebuyer Credit. A one-time credit under the American Recovery and Reinvestment Act, it allows those who qualify to receive as much as an $8,000 refund for a home purchased between April 8, 2008, and Dec. 1, 2009.
He added that, for newly constructed homes, the purchase date is considered the date the home buyer is first able to occupy the home. Additionally, the credit may not be claimed on the home buyer's tax return until after the buyer closes on the purchase.
Home buyers must also be those who have not owned a primary residence in the past three years, he continued, a rule that applies to both spouses in a marriage.
"Taxpayers buying a home in the next few months, who have already filed their 2008 tax return, can consider filing an amended tax return," Green said. "The amended tax return will allow them to claim the Homebuyer Credit on the 2008 return without waiting until next year to claim it on the 2009 return."
He said the amount of the credit is worth 10 percent of the home-purchase price, up to $8,000, or $4,000 for married individuals filing tax returns separately.
Green said the credit will be adjusted based on the home buyer's existing tax liability at the time the credit is requested. The credit also begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers.
"The biggest misunderstood thing is that it's a flat $8,000 credit," said Kevin Anderson, branch manager of Wells Fargo Home Mortgage in McDonough. "It's not a flat credit."
Anderson said Wells Fargo customers have posed several questions lately pertaining to the credit.
"The biggest question is who does qualify," he said. "We ultimately defer everybody to their CPA and tax advisers. [But] if they have not found their dream home as of yet, we recommend they get pre-approved versus pre-qualified, which means we take all of the documentation to the underwriters as they look for their home. It greatly helps in expediting closings."
As the window of opportunity for potential first-time home buyers is closing quickly, Anderson suggested they begin talking to their loan officers about what they can afford and get in touch with a licensed Realtor to find available homes on the market. He said the window for closing on a home averages about 33 days in Georgia, most being closed between 15 and 60 days.
Those who qualify for the First-time Homebuyer Credit and apply by the Dec. 1 deadline should be able to receive their refunds within seven to 10 business days if they file their primary tax returns electronically, said Green, the IRS spokesman. Those who file by mail should expect a four- to six-week wait.
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