April 25th, 2010 10:42 PM by Eric Fang
Here are some important details about this tax credit.
1)Dollar-for-Dollar BenefitThe benefit of a tax credit is that it's a dollar-for-dollar benefit, rather than a "tax deduction" or reduction in tax liability that would only reduce $1,000 to $1,500 when all was said and done.
So, if a first-time homebuyer who qualified for the entire benefit were to owe $8,000 in income taxes and would qualify for a tax credit of $8,000, she would owe nothing.
2)It's Refundable!That means a homebuyer can receive a check for the credit if he or she has little or no income tax liability.
For example, if a first-time homebuyer is eligible for a tax credit of $8,000 but is liable for $4,000 in income tax,she can still receive a check for the remaining $4,000!
3)What are the Income Caps?Single tax filers with incomes up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers with incomesof $145,000 and above are ineligible.
Joint filers with incomes up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers with incomes of $245,000 and above are ineligible.
4)What's the Maximum Purchase Price?Qualifying buyers may purchase a property with a maximum sales price of $800,000.