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Most of the mechanics of the credit will be the same as the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser’s income tax liability. One difference is the fact that repayment of the credit will no longer be required. If any credit amount remains unused, the unused amount will be refunded as a check to the purchaser.
Amount of Credit - Maximum credit amount increased to $8000.
Eligible Property - Any single family residence that will be used as a principal residence.
Refundable - Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.
Income Limit - Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).
First-time Homebuyer Only - Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase.
Revenue Bond Financing - Purchasers who utilize revenue bond financing can also use this credit.
Repayment - No repayment for purchases on or after January 1, 2009 and before December 1, 2009.
Recapture - If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
Termination - December 1, 2009
Effective Date - All revisions are effective as of January 1, 2009
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