The other day, I overheard a colleague of mine telling a client that he would get $15,000 in stimulus cash if he bought his house.
I wanted to run over and grab the phone from his hands.
The truth is, there is so much confusion out there about what was or was not finally included in the stimulus package - and, not to mention, what the eligibility requirements will finally be for President Obama’s refinancing plan - that it’s hard even for people in the business to keep it straight.
The National Association of Home Builder has a pretty straightforward Q&A about the home buyers tax credit, but I boiled down some of the best information, the stuff you need to really pay attention to, here:
Am I eligible?
First, your “modified adjusted gross income” must be less than $95,000 - or you and your spouse, filing jointly, must make less than $170,000 total. Cleared that hurdle? Now, you are eligible only if you or your spouse have NOT owned a primary residence in the past three year. That means vacation homes or investment properties are OK and do not disqualify you. Also, you must purchase the property, or close, from Jan. 1, 2009, to Nov. 30, 2009. A wide range of properties are eligible - even homes you build new yourself on land you already own.
How much will I get?
It depends on your income and on the price of the house.
If your “modified adjusted gross income” is less than $75,000 alone or $150,000 as a married couple, you will receive a credit of 10 percent of the purchase price - up to $8,000. So that means if your house is anywhere OVER $80,000, you will get an $8,000 credit. If you are lucky and the price is, say, $50,000, you’ll get a $5,000 credit.
But if you make more than that, but up to the income limit (see above), the credit is reduced proportionally.
How is this tax credit different from the one last year?
It does not have to be repaid. It’s a gift. From all of us to you.
People keep saying the tax credit is refundable. What does that mean?
It means that even people who pay little to no federal taxes can claim it.
