super t asked in Business & FinanceCredit · 1 decade ago

The first time home buyers tax credit ($7500)?

Could somebody please provide me with some info in regards to how the first time home buyers tax credit works?

The way I understand it, once I purchase a home (I am first time homebuyer) I would be qualified to receive additional $7500 (loan that has to be repaid in 15 years) on top of my my tax return?

Lets say I buy a home before December 31st 2008, would that mean that on my taxreturn that I would file around February 2009, I would receive my regular tax return + $7500?

If so, what happens if I purchased a home around late January 2009?

Could I still have that $7500 when filing for my 2008 return in Feburary of 2009?

Please let me know.

3 Answers

  • Anonymous
    1 decade ago
    Favorite Answer

    Taxpayers who have not owned a home in the last three years may

    qualify for a “tax credit” of up to $7,500 or 10% of the purchase price of

    the home, whichever is less. The term “tax credit” is a misnomer since

    the credit used this year must be paid back over a period of 15 years.

    The credit is subject to phase-out provisions for high-income earners.

    And, yes, you can claim a purchase made in January 2009 against your 2008 taxes.

    The purchase must be made between April 9, 2008 and July 1, 2009.

  • 1 decade ago

    I am getting the 7,500 tax credit on my home I just purchased in September so I speak from expierence.

    It's more like a interest free loan recieved via a tax credit. You have to pay back $500.00 on every yearly tax return for 15 years.

    When you get the tax credit - it is applied to your tax owed/refund (bottom line). So if you owed the IRS 500 after you filed, they would apply the tax credit and you would recieve a check of $7,000.

    If you purchased the house in late January. You will probably have to claim it on your 2009 taxes. I'm not sure on this point though.

    Another great thing about this credit is: if you sell your house at a loss before the tax loan is paid back, the IRS will wipe away the remaining debt.

    You can still get the tax credit as long as you purchase the home between Feb 2008 -July 1, 2009

  • 1 decade ago

    It's a tax credit -- a credit toward your income taxes due of up to $7500. Say your federal taxes for the year come to $15,000. Less the $7500 tax credit means you pay $7500 income tax.

    Calendar year! If you buy in January 2009, it is applied to 2009 taxes you file in 2010. Assuming such a tax break survives with the taxaholic Dems in Congress.

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