First-time Homebuyers Tax Credit

firsttime homebuyerIn November 2009, Congress approved and President Obama signed the Worker, Homeownership and Business Assistance Act of 2009, extending and expanding the first-time homebuyer credit created in the American Recovery and Reinvestment Act of 2009. 

Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. 

  • An $8,000 tax credit is available to first-time homebuyers who purchase homes before May 1, 2010 (and close on the home by June 30, 2010).  These taxpayers have the option of claiming the credit on either their 2009 or 2010 return.  
  • A homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately) is available to homebuyers who have lived in their current homes for at least five years.  
  • The credit phases out for individual taxpayers with income above $125,000 and for join filers with income above $225,000

Tax credits are also available for first-time homebuyers who purchased their homes in 2008.  The Housing Economic Recovery Act of 2008 established a $7,500 tax credit that is similar to a no-interest loan and must be repaid in 15 equal, annual installments beginning in 2010.  

For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase.

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Short-term help for jobless Virginians
The Worker, Homeownership and Business Assistance Act includes also extends unemployment benefits for Virginians. Unemployed workers will now receive 20 weeks of additional jobless benefits. The bill also includes a tax break that allows small business owners to carry back losses to get refunds on taxes paid over the past five years. Click here for more info.