First Time Home Buyer Tax Credit | Wichita Ks Homes for Sale

Expanded Tax Credit
A tax credit of up to $8,000 for first time buyers and up to $6,500 for qualified repeat buyers is still available. You are considered a first time buyer if you have not owned a home in the last 3 years. Repeat buyers need to have owned a home for 5 consecutive years out of the prior 8 years. The tax credit is based on up to 10% of the purchase price up to the limit of $8,000 for first time buyers and $6,500 for repeat buyers.
All buyers need to be entered into a binding sales contract on or before April 30, 2010 and have the closing on or before June 30, 2010. I would advise people to avoid the rush and buy now! Income limits have also been increased for home purchases made after November 6, 2009. The new limits are $125,ooo for individuals and $225,000 for married couples filing jointly.
Homes priced at $800,000 and above do not qualify for any tax credits. People who are claimed as dependents by another tax payer and those under 18 years old do not qualify. Homes purchased from relatives or your spouses relatives also do not qualify for the tax credit. The IRS defines relatives as ancestors such as parent, grandparent, etc. and also lineal descendents such as child, grandchild, etc. and spouses. Married couples may not claim the first time buyer credit if either spouse has owned a home in the last 3 years. However they may qualify for the repeat home buyer tax credit.
There are also extended tax credit benefits that apply to members of the military, the foreign service, and the intelligence community.
These tax credits never have to be repaid unless the home is sold or ceases to be used as the home buyers principal residence within 3 years after the original purchase.
Original Tax Credit Rules
The Tax Credit is for home buyers (either spouse if filing jointly) who have NOT owned a principle residence during the three-year period prior to the purchase. Ownership of vacation property or rental property does not disqualify home buyers from this program.
The maximum credit is $8,000 or 10% of the home purchase, whichever is less.
The credit is available for homes purchased on or after January 1, 2009 and before December 31, 2009.
To qualify for the full tax credit, married couples' modified adjusted gross income (MAGI) should be under $150,000 and single filers' MAGI should be less than $75,000. Partial tax credits may be available for married couples with MAGI incomes of over $150,000 but under $170,000 and single filers with incomes over $75,000 but under $95,000. If married couples who qualify for the first-time tax credit file separately, they would both claim 5% of the home purchase or $4,000 each (whichever is less) on their tax returns.
Home buyers who qualify for this program, but who do not intend to purchase a home till the end of 2009, may elect to alter their tax withholdings (up to the amount of the of the tax credit) in order to save up money for a down payment. However, if the purchase of the home does not occur, the taxes must be repaid to the IRS.
There is no recapture or repayment clause IF the home is owned for at least 36 months.
The effective date of purchase for new construction (even if buyer owns title to the lot) is the date the owner first occupies the house. So even if construction began in 2008, as long as the home and buyers qualify for the tax credit, they will be eligible if they take possession any time during 2009. However, new construction bought from the builder is only eligible if the settlement date (closing) takes place between January 1, 2009 and December 31, 2009.
The law allows taxpayers to elect to treat qualified 2009 purchases as a 2008 purchase so that they can receive the tax credit on their 2008 tax returns.
The full amount of the eligible tax credit is refunded to the buyer, regardless of whether the buyer has paid an equivalent amount in taxes.

The American Recovery and Reinvestment Act of 2009