First-Time Home buyer Credit of Up to $8,000
Qualified first-time home buyers who purchase a home in 2009 before December 1, 2009 will receive a tax credit of up to 10% of the purchase price (up to $8,000). Home buyers can claim the credit on their income taxes and receive money back in excess of taxes. For example, if you are owed a refund of $1,000, you could now receive up to $9,000 back.Program details:
- The credit does not have to be repaid, provided the home is owned for more than three years.
- To be considered a first-time home buyer, the purchaser (and spouse) must not have owned a home for three years prior to home purchase.
- The home must be the purchaser’s primary residence; only single family homes qualify.
- Full credit will be issued to individuals with an adjusted gross income of no more than $75,000 ($150,000 on a joint return). Individuals with incomes over $95,000 ($170,000 on a joint return) will not receive the credit.
- The new credit may be combined with state/local revenue bond money to help finance the home purchase.
Tax Credit for Energy Efficient Home Improvements
The tax credit is now 30% of the cost of the improvements (up to $1,500). Eligible improvements include insulation, central A/C units, heat pumps, water heaters and energy efficient exterior doors and windows.
FHA, Fannie Mae and Freddie Mac Loan Limits
The new law reinstates 2008’s loan limits for FHA, Fannie Mae and Freddie Mac through December 31, 2009. The limits were equal to the greater of 125% of the local area median home price, or $271,050 for FHA and $417,000 for Fannie and Freddie (overall maximum cap of $729,750). In some areas where the limits were higher, the higher limits will apply.
Tax Relief and Benefits for Families
- A payroll tax credit will provide up to $400 per worker ($800 per couple filing jointly). The credit phases out at $200,000 for couples filing jointly and $100,000 for single taxpayers.
- A new (partially refundable) tax credit offers a maximum of $2,500 toward college tuition and related expenses for 2009 and 2010.
- Unemployed Americans can now claim up to 33 weeks of benefits through December 2009. Benefits will be increased by $25 a week, while the first $2,400 received will be exempt from federal taxes.
- Laid-off workers who buy into their former employer’s health insurance through the COBRA program will receive a 65% subsidy on premiums for up to nine months.
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