Tax Help for First-Time Home Buyers

Generous help from Uncle Sam makes 2009 a particularly good year to consider buying your “first” home. If you buy a house before December 1, you could receive a tax credit of 10 percent of the home’s purchase price, up to a maximum credit of $8,000. Unlike the credit that was available for some 2008 first-time purchases, this credit never has to be repaid as long as you own the home for at least three years.

The credit begins to phase out if your modified adjusted gross income is more than $75,000 (or $150,000 if married filing jointly) and disappears after your income reaches $95,000 if you’re single (or $170,000 if married filing jointly). You are considered a first-time home buyer if you (and your spouse) didn’t own a primary residence in the three years leading up to the settlement date of the new home.

Qualifying taxpayers don’t have to wait until they file their 2009 tax returns next year to benefit. The law allows the credit for 2009 purchases to be claimed on an amended 2008 tax return using Form 1040X. Since you’ve most likely already settled your 2008 tax bill, claiming the credit on an amended return would result in an $8,000 refund check.