How to Qualify for the First Time Home Buyer Tax Credit

The First Time Home Buyer Tax Credit was designed to boost the real estate market and help first-time home buyers purchase a home by offering a tax credit valued at up to $8,000.

Things You'll Need

• real estate agent
• income statements
• tax statements

Instructions

Qualifying for the First Time Home Buyer Tax Credit

1. To qualify for the First-Time Home Buyer Tax Credit there are income limitations. The current income limits are $125,000 for an individual and $225,000 for a married couple.

2. The First-Time Home Buyer Tax Credit is 10% of the value of the home, up to $8,000, and is meant only for a primary residence. The maximum credit that a first time home buyer can receive is $8,000.

3. The First-Time Home Buyer Tax Credit time frame was recently extended from its deadline of November 30, 2009. A home buyer now has until April 30, 2010, to have a home under contract. The home purchase must be closed by June 30, 2010.

4. The tax credit is claimed through the IRS, Form 5405. The home must be closed to claim the credit; it cannot be claimed for a home that will be purchased in the future.

5. The tax credit can be used as a credit at closing if the home is being purchased with an FHA loan.

Tips & Warnings

• When looking for a home to purchase it can be very helpful to use an experienced real estate agent, someone who can help walk you through the process and make sure that all of the contractual obligations are carried out.

Resources

• Home Buyer Tax Credits
• IRS information about the First Time Home Buyer Tax Credit