If you did NOT purchase your principal residence BETWEEN November 7, 2009 and September 30, 2010*, click here.

*The September 30, 2010 settlement deadline applies ONLY if a written binding contract to purchase the principal residence went into effect on or before April 30, 2010.

A principal residence purchased between November 7, 2009 and September 30, 2010* is covered under the "Worker, Homeownership, and Business Assistance Act of 2009" and "Homebuyer Assistance and Improvement Act of 2010." Under these laws, the refundable first-time homebuyer credit remains at a maximum of $8,000 and the NEW long-term resident homebuyer credit is a maximum of $6,500 for a principal residence purchased on or after November 7, 2009.

You MUST be Considered a "First-Time Homebuyer" or "Long-Term Resident Homebuyer"

A “first-time homebuyer” is an individual who has NOT owned another principal residence in the United States or District of Columbia at any time during the 36-month period prior to the date of purchase.

If the individual is married at time of purchase, neither the individual nor his or her spouse may have had ownership of a principal residence during the 36-month period prior to the date of purchase. Even if the individual is filing separately from their spouse, the individual MUST take into account their spouse's ownership interest in any other principal residence.

A "long-term resident homebuyer" is an individual who MUST have owned AND used the same home as a principal residence for at least any five consecutive years of the eight-year period ending on the date of purchase of the new principal residence.

The Home MUST be Your Principal Residence

An individual's "principal residence" is the home where he or she ordinarily lives most of the time. An individual can only have one principal residence at any one time. The home MUST be a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities. For purposes of claiming the first-time homebuyer credit, the principal residence MUST be located within the United States including the District of Columbia.

The Settlement Date MUST be No Later Than September 30, 2010*

The "settlement date" is the date that closing occurs and title to the property is transferred to the new homeowner. If a principal residence is being constructed, the settlement date is considered to be the first date the individual occupies the home as their principal residence.

NOTE: Effective December 1, 2009, special rules apply to individuals who are qualified military personnel on official extended duty service.

*The September 30, 2010 settlement deadline applies ONLY if a written binding contract to purchase the principal residence went into effect on or before April 30, 2010.

Credit Amount

The amount of the homebuyer credit depends if you are considered a "First-Time Homebuyer" or "Long-Term Resident Homebuyer."

For a qualifying "first-time homebuyer" who purchases a principal residence between November 7, 2009 and April 30, 2010*, the REFUNDABLE homebuyer credit is equal to 10% of the purchase price up to a maximum credit of $8,000 ($4,000 if married filing separately).

For a qualifying "long-term resident" who purchases a principal residence between November 7, 2009 and April 30, 2010*, the REFUNDABLE homebuyer credit is equal to 10% of the purchase price up to a maximum credit of $6,500 ($3,250 if married filing separately).

If there is more than one qualifying homebuyer for the same principal residence, the credit may be allocated among the qualifying homebuyers or one homebuyer may claim the entire credit.

Income Limitations for Claiming the Homebuyer Credit

For couples who are married filing jointly, their modified adjusted gross income (MAGI) MUST be $225,000 or LESS to qualify for the full credit. A partial credit is available if their MAGI is over $225,000, but less than $245,000. No credit is available if MAGI is $245,000 or higher.

For all other filers, their modified adjusted gross income (MAGI) MUST be $125,000 or LESS to qualify for the full credit. A partial credit is available if their MAGI is over $125,000, but less than $145,000. No credit is available if MAGI is $145,000 or higher.

Repayment of the Homebuyer Credit

If the principal residence is purchased between January 1, 2009 and November 6, 2009, the credit generally does NOT have to be repaid. However, if the home ceases to be the individual's principal residence at any time within 36 months of the date of purchase, ALL of the credit must be repaid in the year it ceases to be the individual's principal residence.

There are some exceptions to repayment:

• If you sell the home to someone who is not related to you, the repayment in the year of sale is limited to the amount of capital gain on the sale. If you have a capital loss, repayment is not required.

• If you die, repayment of the credit is not required. If you filed a joint tax return and then you die, your surviving spouse would be required to repay his or her half of the credit.

• There is no repayment if the home is transferred in a divorce settlement. The spouse receiving the home is responsible for any possible future repayment.

• There is no repayment if the home is destroyed or condemned and you acquire a new principal residence within 2 years of the event.

NOTE: Special rules apply to individuals who are qualified military personnel on official extended duty service.

Who Else CANNOT Claim the Homebuyer Credit?

• Individuals who are claimed as a dependent on another person's tax return for the year of purchase,

• Individuals who purchase a principal residence that costs over $800,000,

• Individuals who have NOT attained age 18 as of the date of purchase (unless married and their spouse is age 18 or older,

• Individuals who buy and sell the same principal residence in the same year or the home ceases to be used as a principal residence by the end of the year,

• Individuals whose principal residence is NOT located in the United States or District or Columbia,

• Individuals who acquire their principal residence by gift or inheritance,

• Individuals who are nonresident aliens,

• Individuals who purchase a principal residence from a close relative**.

**Close Relative Defined

1. Your spouse, ancestors of you or your spouse (parents, grandparents, etc.), or lineal descendants of you or your spouse (children, grandchildren, etc.).

2. A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock of the corporation.

3. A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interest.

When to Claim the Homebuyer Credit?

For a qualifying principal residence purchased between November 7, 2009 and December 31, 2009, the credit can be claimed on an original 2008 federal income tax return, a 2008 amended federal income tax return, an original 2009 federal income tax return, or a 2009 amended federal income tax return.

For a qualifying principal residence purchased between January 1, 2010 and September 30, 2010*, the credit can be claimed on an original 2009 federal income tax return, a 2009 amended federal income tax return, an original 2010 federal income tax return, or a 2010 amended federal income tax return.

Can the credit be claimed if a homebuyer has no taxable income and/or is not required to file a tax return?

Yes. The credit is fully refundable if the person qualifies for the homebuyer credit. Although there are maximum income limits for qualifying homebuyers, there is no minimum income criteria. Therefore, an individual with no taxable income who qualifies for the credit may file for the sole purpose of claiming the credit for a refund.

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