The stimulus package provides a credit of 10% of the home purchase price, up to a maximum of $8,000 for those who purchase a home between January 1, 2009 and December 1, 2009. The credit may be taken on either your 2008 or 2009 tax filing, does not require repayment, and works to reduce your tax liability.
If the closing on your home takes place after April 15, but you want to take the credit on your 2008 taxes, you would have to have filed for an extension, but as long as the closing takes place prior to October 15, you can claim the credit by that extension cut off date.
Already filed your return for 2008, and don’t want to wait until 2009 to take the credit? You can still claim it by filing an amendment to your return with IRS Form 1040X.
If you plan to take the credit for 2009, you can either claim it on your 2009 taxes or adjust your withholdings to reflect the credit.
You will be eligible to take the full credit if your income is under $75,000 if filing individually, or $150,000 if filing jointly. As your income rises, the percentage of credit drops. Once you hit an income of $95,000 filing individually or $170,000 filing jointly, you are no longer eligible to take the credit.
For more information on this stimulus package, visit The National Association of Realtors.