Homebuyer tax credits are made available to Americans buying a home. This was originally applied to home purchases made by homebuyers from April 9, 2008 to July 1, 2009. Nonetheless, President Obama extended the original time frame to May 1, 2010 and gave them until end of June 2010 to close their transactions. Furthermore, the House voted to extend it until September 30 of this year.

Those who are eligible for these credits are those homebuyers who are defined by law as people who have not owned a main residence during the three-year period before the home purchase. They could be eligible for ten percent of the purchase price of the property, with a maximum of $8,000. Present homeowners who have been living in their main residence for five years in a row out of eight and are buying a home to be their principal home could qualify for this type of credit up to ten percent, up to a maximum of $6,500.

Homes that qualify for these tax credits are those with a purchase price of not more than $800,000, which includes newly-built homes or resale, townhomes, single-family detached homes or condos as long as it will be used as the primary residence. Rental properties and vacations homes do not qualify. Furthermore explained, this is refundable, which means that if the amount of income taxes you owe is lower than the credit amount that you qualify for, the US government will send you a check with the amount of the difference. For instance, a first-time homebuyer qualifying for the full $8,000 credit who owes $5,000 income taxes will pay nothing to the IRS and receive a $3,000 payment from the government. If you are going to receive $1,000 refund, you will receive $9,000 all in all.

This is indeed a true credit since it does not have to be repaid unless a homeowner stops using the home as his or her main residence or sells it within three years after making the purchase. Many people have signed contracts to purchase a home by September 30 before the tax credit expired. For a credit for first time homebuyers or those currently owning a home, if your purchase date is May or June 2010, you will have to prove that you entered into a contract to purchase the home before May. It is important to submit the documentations needed for this. Those who are members of the military and the intelligence community have an additional year to buy a home and qualify for the tax credit.

Filing and claiming for this tax credit requires several documentations and should be submitted and filed through mail. Nevertheless, many have used the Turbo Tax, TaxAct to calculate the taxes and complete their returns and printing the paperwork and submitting it. When homebuyers started claiming their first-time homebuyers tax credits last year together with an amended 2008 tax return, they began receiving the credit after six weeks. As more and more people are applying, receiving the tax credit took longer, especially if documentation is not complete.

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