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03.18.2010 / The $6,500 Existing Homebuyer Tax Credit

Existing homeowners, now it is your turn to get a big tax credit for purchasing a new home. The Worker, Homeownership and Business Assistance Act of 2009 has established a tax credit.

"This new credit will give qualified home owners up to $6,500 to purchase a new home."

This new credit will give qualified existing home owners up to $6,500 to purchase a new home. What does this mean for you? We have the scoop on all the details:

Who is eligible?
Any qualified current homeowner who is purchasing any kind of home that will be used as a principle residence. A qualified current homeowner is a person who has owned and resided in the same home for at least five consecutive years out of the eight years prior to the purchase date. For married couples, this applies to both the home buyer and their spouse.

Do I have to upgrade my home?
No, the tax credit applies even in you decide to purchase home that is less expensive than your current home.

What is the timeframe?
Existing homeowners must purchase a new principle residence after November 6, 2009 and on or before April 30, 2010. Or, the home must be purchased by June 30, 2010 with a binding contract signed by April 30, 2010.

How is the tax credit calculated?
The tax credit is calculated at 10% of the purchase price up to a maximum of $6,500. Homes with a value of $800,000 or more are not eligible for the credit.

What are the income limits to receive the tax credit?
The income limits are $125,000 for a single tax payer and $225,000 for married taxpayers filing jointly. The tax credits are reduced for single and married tax payers with modified adjusted gross incomes (MAGI) up to $20,000 above these limits.

How do I claim the tax credit?
You simply fill out IRS Form 5405 to determine your tax credit amount and then claim that amount on line 67 on the 1040 income tax form.

Is the tax credit refundable?*
Yes, the credit will be added to any refund that you are to receive or will be received as the net amount between what you owe to the IRS and the amount of your credit.


*For more information on the tax credit, visit http://www.federalhousingtaxcredit.com.

Call a First National Bank Mortgage Specialist at (402) 602-5300 or (800) 687-5626. Visit our website at firstnational.com/mortgage to apply now, check our current rates, compare loans or find a mortgage specialist near you.


Information on this web site is provided by NAHB (National Association of Home Builders) for general guidance only. The information on this site does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such.

Information obtained from The National Association of Home Builders.

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