The Worker, Homeownership, and Business Assistance Acto of 2009 (WHBBA) was signed into law by President Obama on November 6, 2009.

This information is taken from the Internal Revenue Service. Please feel free to call or email me for further information. (Scroll down for details)

Homebuyer Tax Credit

The credit is allowed to buyers who sign a binding contract by April 30, 2010 and close by June 30, 2010.

-First-time homebuyers qualify for a maximum credit of $8,000. A first-time homebuyer is defined as someone who has not owned a home in the three years prior to the purchase

-Long-time homeowners qualify for a maximum credit of $6,500. A long-time homeowner is defined as someone who has owned and used the same principal residence for five consecutive years out of the eight-year period ending on the date of purchase.

No repayment is required, unless the home ceases to be the main home within 3 years of purchase date.

Taxpayers can elect to claim the credit on their prior year return, either original or amended.

Eligibility Requirements:

-Purchased home must be the buyer's primary residence.

-Must close on the purchase prior to claiming the credit.

-Must file Form 5405 with relevant tax return to claim the credit.

Eligibility Limitations:

-Income limits: For individuals: credit begins phasing out at $125,000 and caps out at $145,000. For joint filers: credit begins phasing out at $225,000 and caps out at $245,000.

-For married taxpayers, both spouses must meet eligibility requirements.

-The definition of a purchase excludes property acquired from a related person.

-Non-resident aliens are ineligible for the credit.

-Home cannot be acquired by gift or inheritance.

-No credit allowed if purchase price exceeds $800,000

-Dependent cannot take a credit.

-No credit allowed for a purchase from an in-law.

-Purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet the age requirement.

-Purchaser must attach a signed settlement statement to the tax return.

Repayment Triggers - No repayment required unless a repayment trigger within THREE YEARS:

-Home ceases to be a main home. (Within three years).

-Home is converted to rental or business use. (Within three years).

-Home disposed of by foreclosure, repossession or abandonment. (Within three years).

-Home is sold. (Within three years).

No Repayment Required for Military and Certain Civilians

-No repayment is required for members of the military or certain other federal employees if the residence is sold or ceases to be the taxpapyer's principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual's spouse) for extended duty.

Requirement to File Form 5405

-Claim the First Time Homebuyer Credit.

-Dispose of main home.

-Repayment of credit.

Resources

-IRS.gov Search "ARRA information center" or "first time homebuyer credit"

-IRS Publication 523, Selling Your Home, Form 5405, First-Time Homebuyer Credit