President Obama signed into law on November 6, 2009 the Worker, Homeownership and Business Assistance Act of 2009.  This program makes changes to the First Time Home Buyers Tax Credit program as well as establishes a new program to give a tax credit to people who have owned thier current home consecutively for the past five of the last eight years, and who purchase a replacement principal residence with a signed contract no later than April 30th, followed by a closing no later than June 30th.

Purchases of homes after November 6th require the use of a new version of IRS Form 5405. 


FIRST TIME HOME BUYERS
The First Time Home Buyers Program was originally set to expire on November 30, 2009.  It is now set to expire on April 30, 2010.  If you purchased the home after November 30th, you must adhere to the new guidelines:

• House cannot cost more than $800,000
• No one under age 18 can claim the credit
• Anyone who was claimed as a dependant on another taxpayer's federal tax return cannot claim the credit
• The expanded income limititations for purchasers range to $125,000 in modified adjusted gross income for single tax payers and to $225,000  for those who file jointly.
• Single tax payers with incomes between $125,000 and $145,000 may be eligible for a phased-down credit amount.  Joint filers beween $225,000 and $245,000 may also be eligible for a phased-down credit.

REPEAT HOME BUYERS

Qualified repeat home buyes may be eligible for up to a $6,500 tax credit. 

Must meet home and income limitiations as above.
The home buyer must have owned their principal residence for a consecutive five of the previous eight years.
Signed a contract for a replacement principal residence no later than April 30, 2010 and close on the home by June 30, 2010.


MILITARY

Members of the armed forces, plus diplomatic and intelligence personnel who are in service in foreign countries have until April 30, 2011 to purchase a home and until June 30, 2011 to close.


The tax credit is 10% of the purchase price of the home up to the maximum of $6,500 for repeat buyers and $8,000 for first time home buyers.  Please consult your CPA to verify your eligibility for the tax credit.