Tax Credit 2010

If you purchased a home last year, then you may be eligible to receive the $8,000 tax credit this year. Specifically, if you purchased between January 1 and April 30, 2010, then you may be eligible for one of the two tax credits: a first-time home buyer tax credit and a repeat home buyer tax credit.

The first-time home buyer tax credit is worth 10% of the purchase price of the home, up to a maximum of $8,000. To qualify as a first-time home buyer, you have to be someone who hadn't owned a principal residence in the three years before the purchase. The repeat home buyer tax credit is worth up to 10% of the purchase price, up to a maximum of $6,500. To qualify for the tax credit as a repeat buyer, you have to be someone who had owned and lived in the same home for at least five consecutive years of the eight years.

Tax Credit | Qualifications: sign contract & close date

To claim the tax credit, you must have signed a contract to purchase your home residence by May 1, 2010 and closed by September 30, 2010 (provided the original contract stated that you were to close by June 30, 2010). Remember, originally the closing date was supposed to be June 30, but due to the backlog of last minute sales and short sale being purchased, congress extended that closing date until the end of September.

Tax Credit | Qualifications: income & property price

Regarding income, the full tax credit is available to folks with a modified adjusted gross income (MAGI) of up to $125,000, )or $225,000 for joint filers). A reduced credit is available for home buyers with MAGI of up to $145,000, or $245,000 for married homeowners. The price of the property must be under $800,000.

Tax Credit | Documents needed

A copy of your settlement statement, or HUD-1 that was provided at closing.
For newly constructed homes, a dated copy of the certificate of occupancy that shows your name and the address of the home.
For repeat buyers, copies of documents showing that you lived in your previous residence for five consecutive years during the past eight years. Acceptable documents include mortgage interest statements, property tax records or homeowners insurance statements.
Once you file for the tax credit, expect to wait up to 6 weeks to receive your check from the IRS.

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