First-time homebuyer credit

Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 can receive up to:

• $4,000 for married individuals filing separately, or
• $8,000 for all other individuals.

People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year. If you are a qualified first-time homebuyer in 2009, the filing options to consider are:

• File an extension. Taxpayers who haven't yet filed their 2008 returns but are buying a home soon can request a six-month extension to October 15. This step would be faster than waiting until next year to claim it on the 2009 tax return. Even with an extension, taxpayers could still file electronically, receiving their refund in as few as 10 days with direct deposit.
• Amend the 2008 tax return. Taxpayers buying a home in the near future who have already filed their 2008 tax return can consider filing an amended tax return. The amended tax return will allow them to claim the homebuyer credit on the 2008 return without waiting until next year to claim it on the 2009 return. Keep in mind, however, that the IRS may scrutinize an amended return more closely than it would an originally filed return.
• Claim the credit in 2009 rather than 2008. For some taxpayers, it may make more financial sense to wait and claim the homebuyer credit next year when they file the 2009 tax return rather than claiming it now on the 2008 tax return. This could benefit taxpayers who might qualify for a higher credit on the 2009 tax return. This could include people who have less income in 2009 than 2008 because of factors such as a job loss or drop in investment income.

For more information on the credit, including how to qualify, please visit the IRS website here.

For information on the California credit for purchases of new homes, please visit our blog post here.