Deadline approaches for First-Time Homebuyers Credit

By Johnny Jackson


New home owners have 15 days remaining before the extended deadline of the federal First-Time Homebuyers Credit expires on April 30.

More than 71,000 Georgia taxpayers have collected some $506 million in First-Time Homebuyer Credits, according to IRS Spokesman Mark Green. Green noted that nearly 1.8 million Americans had filed returns by mid-February, and were able to collect a combined $12.6 billion in tax credits for homes they purchased in 2008 and 2009.

Green said would-be homeowners have until April 30 to enter into a binding contract to purchase a home, and must close on the home by June 30, in order to qualify for the credit. It provides up to $8,000 for taxpayers buying a new home, if it is their first home, or if they have not bought a home in the three years before the date of purchase.

"That credit is quite a favorable credit, because it's a refundable tax credit," added Andre Re, a retired IRS executive and Volunteer Income Tax Assistance (VITA) site coordinator in Henry and Clayton counties.

Re said new homebuyers should be sure to provide the IRS with a copy of their closing statement to verify a contract has been made with the intent to purchase a home.

The application for the credit must be filed in paper form, with the appropriate documentation and income tax returns or amended returns by April 30, Re explained. He said when you file your return, it is always good to send more information, rather than less.

Taxpayers should attach a copy of the pages from the signed binding contract to make a purchase, said Green, who added that binding contracts should show all parties' names and signatures, the property address, the purchase price and the date of the contract.

"Homebuyers must attach a copy of a properly executed settlement statement, such as the HUD-1 form, for their purchase," Green said. "These statements can vary by geographic area and local law, and typically, are not available for the purchase of a newly constructed home or a mobile home."

Those who qualify for the current credit are long-time residents, who purchased a new, main home after Nov. 6, 2009. Members of the Armed Forces and certain federal employees serving outside the United States have an additional year to buy a principal residence in the U.S., and still qualify for the credit.

"For married couples, both spouses must qualify in order to claim the credit," Green continued. "Income limits [also] apply for single and married taxpayers. Buyers who purchased homes through Nov. 6, 2009, may qualify for the full credit, if their modified adjusted gross income is $75,000 or less [$150,000 for joint filers]."

Green said those who bought homes on Nov. 7, 2009, or later, are eligible for a full credit based on their modified adjusted gross incomes of up to $125,000, or $225,000 for joint filers.

He said the credit is reduced for higher incomes and eventually phases out. To learn more about the credit, visit the IRS web site at www.IRS.gov/recovery.