What Does The 8000 Dollar Tax Credit For First Time Homebuyers Mean To You?

Money

by Lamar Tyler | on March 4th, 2009 | 61 comments

The article we ran on the 8,000 dollar tax credit which is a part of the new stimulus plan has been our most successful article to date with almost 20 thousand views in a short period of time. A lot of the people that left comments had questions on how this was going to affect them directly so we brought in the experts! Antoine and Shonda Grier from ASG Investments are going to break it down for us in a two part series. Below we’ll post excerpts from a longer piece that you can go to their site to read along with their contact info in case you have additional questions.

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a primary residence on or after January 1, 2009 and before December 1, 2009. Unlike the first tax credit enacted in 2008, the new credit does not have to be repaid. One thing is for sure, the enhanced tax credit is providing an excellent opportunity for new home buyers. It’s no secret that we are in a struggling economy and the government has been taking steps to try and revive it, especially the housing market which many say is the heart of the problems.

The American Recovery and Reinvestment Act of 2009 (The official name of the tax credit) has a few key components that home buyers should be aware of. Most importantly … it’s for first time home buyers and the credit does not have to be paid back. The credit is equal to 10% of the homes purchase price or a maximum of $8,000.00, and is available for any home bought on or after January 1, 2009 and before December 1, 2009. Single taxpayers with an annual income up to $75,000 and married couples with an income up to $150,000.00 can receive the tax break.

So with all this talk about first time home buyers lets be sure that you understand exactly what the government defines as a first time home buyer. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the past three-year period prior to the new home purchase. In addition for married couples, the law looks at both parties individually but it affects the couple as one. In other words, if you have not owned a property in the past three years but your spouse has owned a principal residence, neither you or your spouse qualify for the tax credit.

However, the tax credit can work for unmarried joint purchases where one party can allocate the credit amount to any buyer who qualifies as a first time buyer. So a parent may jointly purchase a home with a son or daughter allowing the child to get the tax credit. In addition, ownership of vacation or rental properties that are not used as primary residence do still qualify as first time home buyers for the tax credit.

Now let’s take a closer look at the income limits and what all the small legal print exactly means. It’s funny as I sit here and type this, a phrase that a good friend says popped into my head. He would always say “Check the fine print, because what the good Lord giveth the fine print take away”. Now what the income limits state specifically is that the tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) more than $75,000 for single buyers and $150,000 for married couples who file joint tax returns. If an individual makes greater than $95,000 or a couple makes greater than $170,000.00 then the tax credit is reduced to zero. For individuals and couples who’s MAGI falls in between these ranges the tax credit is reduced proportionally.

To find out what MAGI is in plain terms, what to do if you’ve already filed for the old 7500 dollar tax credit and more info visit the ASG Investment Blog to read the entire article. If you have additional questions feel free to call:

Antoine and Shonda Grier
ASG Investments, LLC
1-888-210-6134
Info@asginvestments.com

About the author

Lamar and Ronnie Tyler are the creators of the award-winning blog BlackandMarriedWithKids.com . They also are behind the Amazon.com bestselling DVDs Happily Ever After: A Positive Image of Black Marriage, You Saved Me and Men Ain’t Boys that explores manhood in the African American community. The Tylers are also the proud parents of four children.

http://juan00072002@yahoo.com Juan T. B

what’s to offer for a first time home buyer of a two year one month mortgag if help is out there post it on this page or web site. But if there’s no help for me this was still good information to pass on to a friend.
http://www.wisdomswork.com D Michele

May be a dumb question but, is there a minimum annual income requirement?
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Anna

D Michele said:
May be a dumb question but, is there a minimum annual income requirement?
~~~~~~~~~
There is no such thing as a “dumb question”, or at least that is how I was raised. LOL.
Not that long ago I was only dollars away from being considerd “upper middle class”. Now you are either rich or poor or making ends meet. I fall into the latter.
This $8000 credit is great news, for a single person making $75,000 and a couple making $150,000. My question is, if you make that much money how the heck are you just now a first time home buyer? Never mind I forgot that some love to loaf off mom and dad as long as they can or some would rather rent than take on the huge responsibility that comes with being a homeowner.

Alonzo_Montague

hey i need some help

Alma

Hi. My husband and I just bought a house. I signed a lot of paperwork with him, but the actual loan may be in his name only. We plan to file taxes jointly as a married couple. If the mortgage loan is in one name only, do we still qualify for $8000 tax credit. Thanks!!!
EB

Does anyone know what the tax document number is for the 8000 tax credit? I am buying a house and I want to fill it out when i go to file my taxes.
Thanks!
Pingback: A Bigger and Better Tax Credit for Home Buyers… What does it exactly mean for YOU (Part 2) | Black And Married With Kids
Mike Rowley

I dont pay taxes, I am a 100% disabled veteran. I hope I qualify, I am buying my first time home. I make less then 50,000. do I qualify?

Thank You
Audrey

If I filed my taxes before the bill was signed am I still eligible ro the tax credit or do I have to wait to file my taxes next year?
Bex

My husband and I are buying a house for the first time this year and we fit in the income requirements for the 8,000. However my brother is going to be a joint owner and he makes above the income requirements. I see above that you can have joint ownership and let one person take the tax credit. My question is will they consider all of our incomes including my brothers or would they just look at my husband and I, and give us the credit.
Drew

My wife and I have never owned a home until recently, however, “recently” came in August of 08. I am confused. The bill says that if you have not owned a home in the last 3 years you qualify, but only if you bought from January of 09 or later. So why do the people that rec’d the lesser 7500 dollar tax credit that must be paid back be punished with paying it back, while the others that are in the same situation we are in get 8000 dollars (500 more) and don’t have to pay it back. Is there a measure that the 7500 dollar tax credit will be given the “you don’t have to pay it back” benefit? Because it really sucks that the others that are having financial difficulty must pay something back that others won’t.

Drew
http://saraferrar.wordpress.com/2009/02/18/first-time-home-buyer-tax-credit-no-longer-a-loan/ Callie

Drew,

You need to read up on the $7500 tax credit…. As long as you keep the home for 3 years and do not sell it then you will not have to repay the “short-term-loan”… They tried increasing the amount to $15000 but it was not voted on however they did vote on changing it from the loan to the credit if kept for 3 years. I have attached a link about it. There are several online if you Google it.

Hope this helps!

Callies last blog post..10 Things to Take the Trauma out of Homebuying
Mike

So if I buy a house, let’s say august this year, and I’m a 1st timer and meet the income requirements. All I have to do is file for the 8 grand tax credit come tax time in 2010? If so I would get it in spring of 2010? Also is the 8 grand taxed?
sarah

Time is getting closer to buying. I have a couple of questions. We sold our house Aug 24, 2006. But we moved May 26, 2006, making it no longer our primary residence on that date. For the $ 8000.00 tax credit do I qualify? I think the tax law reads eligible party being someone who hasn’t owned a primary residence for 3 years. I know its an unusual question on the wording of the new tax law but I want to take advantage of it. Can you clarify this for me so we can start preparing our selves to start the house search. Timing is a big issue for us. In order for us to move to Florida in July we have to have a moving address by end of May or June. If went rent, we will be stuck in a lease for at least six months to a year. Of course, I don’t want to move twice and we loose out on the tax credit. So clarifying the tax question will be the decision maker for us.
mike

if i bought a home in jan and i had a cosigner who bought a home within the last three years but i did not do i still qualify
http://www.jcltranslations.com julio

Hello, your site is very informative, I have one question, can you add information if this is only for people with excellent or good credit or what? thanks a million.
Ken

Ok I’m still a little unclear on how the 8,000 tax credit is given back to me. Let’s say I meet all the requirements which includes not owning or buying a home in 3 years and my joint or individual income is less than the income limits and I have a steady job and usually get back around 2500 to 3500 a year back on my Federal tax return, does that mean if I buy a house I will get back an additional 8,000 in my tax return? Also I heard you can now also deduct of your taxes all or part of the closing cost and fees. Is that true?
Dave

I am planning on purchasing with my son a townhome. He has never owned. I make over 150,000. He makes less than 15,000. Does he qualify for the credit? Anyone have the answer?
BRANDY

would a mobile home count as a principal residence
lisa

I had someone tell me it is also for if you do rent – to – own.. does that mean if i do rent-to-own i can get the tax credit also?
John Doe

What if you don’t have $8000 in taxes to take a credit against? Most first time home buyers would be in lower income brackets that probably don’t have a tax bill of 8K. If you make 30k and paid 15% on all of it, which we know you don’t with deductions, that would only be $4500. So what about the other $2500 of credit?
Troy

My dad recently mailed off all the info in regards to this 8000 tax credit. It has been 2 weeks now, I am still not sure if we are supposed to receive a check for 8000 dollars or what? My dad seems to think that it is a check that should be in the mail. He heard Obama during a speech and it should be here within 10 days. Nothing yet. Anyone else turn in the paperwork for this credit yet?
Carmen

What happen if I was supposed to receive 3000 in my tax return calculating it with the traditional way to do it.

Am I going to receive my 3K + 8K?

Or I am going to receive only the 8K??

Thanks,
Andrea

In response to Carmen, I believe that you get the full amount regardless of the amount you actually pay in taxes. So that means that if the $8,000 is more than the amount you pay, you will get the tax credit, and then receive the remainder of the amount as well.
Melissa

Anna,

Nice comment. Not everyone lives in an economic area where homes are 80k. In many areas of the country people don’t own because they can’t afford to on a 75k salary.
Shellie

Hello
My husband and i are buying a home for the first time….however the owner is financing it for us and not a bank or financial institution.Since this is our first home purchase will we qualify for the credit when we file at the first of the year?The home needs so much work and the tax return would really help us in 2 ways…pay even more towards the home and help on repairs that are so needed.thank you for reading this and i hope to hear your thoughts soon.
Brenda Meadows

my husband is eceased we purched a d wide in 99 we payed cash do i qualified for the 8000.00 break.
Brenda Meadows

my husband is deceased, we bought a d wide in 99 and payed cash, will i qualfied for the 8000.00 tax break.
charles

I recently just purchased a house and doing the paperwork for the 8000 tax credit. Question I have is I made almost 70000 thousand in 2008 and thats what I am using with my taxes and they say I will get the tax credit based on that. I took over a new position and by the end of the year I will make well over the 75000 limit does the tax credit apply for last year income or this years
keri

I have personally sold my home within the last 3 years. My husband bought and financed our new house in his name this year and the title is also in his name. Since technically I am not on the loan or title, can we qualify for the tax credit or partial tax credit. And we file our taxes married – seperate!
Baker

I have one question. I just bought a house and plan on living there for a year or so, but I would like to see it turn into an Income Property. Can I still keep this as a primary residence, keeping the 8000, since I own it, but rent it out to others? Thanks.
BRENT

To answer, There is no minimum income (but if you do not make enough the bank will not finance you). If you are renting the house you can still get the 8000 as long as it is the first home you purchased. For keri: No, you have owned a house in the last 3 years. Your husband can claim it and probably get the money but the government is now checking due to a lot of fraud, and he would face charges. This is based off of you adjusted gross income which includes any salary plus any gifts and any other types of taxable income.
:::Brenda Meadows said:
my husband is deceased, we bought a d wide in 99 and payed cash, will i qualfied for the 8000.00 tax break.:::YES, BUT I AM NOT SURE A BANK WILL LEND MONEY TO RETARDS
storm

Hi, if I buy a house now, is it too late to get the credit?Thanks.
Sheryl

If you make between 25000 to 35000 a year, and the home that you plan to buy is 64000, do you quailify?
James

I make over the allowed amount for the tax credit. Can i put my 11 year old son on the loan of the house and he get the tax credit?
Ed T

I am a 100% disabled veteran.We closed on our new home Aug.1,09. We filed our 2008 taxes electronically(turbo tax)April 14,09.I make under 35,000 a year.My wife only had a couple hundred dollars to report on her income,we filed an mfj return.There is no place on the return to report my income as being a disabled veteran its non reportable.We found out that our 2008 return had not been received by the irs,so we refiled with a tax professional service and they said we were eligible to file for the $8000 first time home buyers credit so we filed for it.I thought I had to wait until 2010 to file and they said I could file now.Well I guess with my return being so complicated(lol)the government had to review it.So they are still reviewing it(sitting on it).If they don’t want to honor what the President has authorized then just tell me.They told me we didn’t show enough income to purchase a home for the credit.I asked them if they knew my income was non reportable(they said that is why its in review).I guess this is where our tax dollars are being spent inefficiency.I just want what I am suppose to get.If they don’t want me to have it then just tell me.any ideas????
Kerstin

Another question regarding married couples: my husband and I have lived separately for the last 18 months and next year we will be filing taxes separately, too. I have never owned a home but he has in the last three years (all in his name.) Given our separate status and the fact that I never owned a home is there a chance I could qualify for the $8,000 tax credit? Thanks in advance!
elisa

In what form will the 8000 tax credit be given , will it be a check during income tax time.
Linda Sinsley

If you payed cash for your home would the tax credit still apply
http://n/a Franklin

My wife and I have agreed to purchase a home,and closed in Nov. 09. The problem is this purchase was with owner financing and the seller is wanting the $8,000 dollar tax credit sent to the real estate agent and not us. Well after learning that I could not use my tax preparer, only one of there choice, I still agreed and thank God we recieved a phone call,and the tax preparer had went through the contract and stated that the tax credit isnt mentioned at all about being used for a down payment AND he was worried and what the agent and seller didnt understand was I paid for the ammended return and he was working for me not them and the agent was really sweating about us getting thier to do this, as this is how he is being paidWe began to get worried and called the agent and the seller. the agent stated he could speak for the seller that no one was trying to take advantage of us or the Gov. but the credit isnt even mentioned in our contract,although their are alot of do not do until we are financed by a morgate lender and also we only have a three year windoe which is Nov.2012 to get him payed off or we have to move what should we do Can u help us any at all ? Day by day I feel my wife and I including the Gov. is being scammed because our credit is poor and we havent any idea what to do.
tonya

I just purchased a house with my fiancee’.. We plan on getting married this year. We closed in Nov. before the tax credit deadline.. Does the tax credit apply to our marital status when we signed the papers? Or if we get married before we file taxes will we not qualify anymore.
Crystal

Does it count on a mobile home purchase?
Vanessa

Do you get any thing on a mobile home purchase? Also, what would the credit be if the purchase price on a cash purchase of $32,000.00?
Heather

My dad and I bought a house jointly in May 2009 and I read above that I can get the full 8000 since I am a first time buyer and he isn’t. Does anyone know of any government websites where it says this? I trust that it’s true, but I want to have proof of it when I go get my taxes done in case she says otherwise. Thanks!
sturdy

So we bought our first home May 2009. We are now looking to move out of state but not planning on selling our house. Will we have to pay back the 8,000 credit if we file for it?
PAT MADONNA

CAN I STILL QUALIFY FOR THE 8,000 TAX CREDIT FOR BUYING A HOME IF I
PURCHASE IT FROM MY DECEASED MOM’S ESTATE ? IT WAS LEFT TO MYSELF
AND MY 3 SIBLINGS. THERE IS A REVERSE MORTGAGE ON IT NOW, WE WILL
PAY IT OFF AND I WILL BUY OUT MY SIBLINGS.
Nat Arthur

I’m a bit confused about when I can sell a house after receiving the $8000 tax credit. I am looking at a job opportunity in a different state and was wondering what rules apply in regards to time limit of having to keep the house.
ronald

my wife and i bought a house with a reverse mortgage . do we get the 8000 tax credit?
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Monica

Hello I just bought a mobile home for 3,500 do I still qualify for the 8,000 tax rebate ?