Stimulus Package First Time Homebuyer Tax Credit

The first time homebuyer tax credit is in full swing. President Obama has announced the stimulus package that is worth 787 billion dollars. This is great news because if you are first time homebuyer, you will have access to free money to purchase a home.

This opportunity will end in December 2009 and President Obama, like others, believe that the stimulus bill will help the US people clear their debt levels and lead a life with less hassle.

This is an exciting time to purchase a home since home prices have fallen back to 2001 price levels. The stimulus package has allotted up to 8 billion dollars for this program.

There are other key points to remember about the stimulus package: There are some other eligibility requirements that need to be met as well. This program is only available to first time home buyers.

Secondly, keep in mind that this program is not a mortgage loan. The money given to you does not have to be repaid. Please note that if you sell the home within three years of your purchase however, the 8,000 dollar tax credit must be repaid.

Keep in mind that this program is only for primary residence purchases and this program is only available between now and December 1, 2009. If you have been looking to purchase a home, now is the perfect time to buy if you if fit these guidelines.

There are plenty of homes on the market to choose from. Your income will determine whether or not you qualify. If you make at least 75,00 dollars or if you and your spouse make more than 150,000, you are not eligible. Also, a married couple with a joint income of 150,000 dollars or more will not qualify for this tax credit.

Here is a brief overview of how the first time homebuyer tax credit works:

* The tax credit applies to purchases that close between now and prior to December 31, 2009.

* The stimulus package program applies only to those homes that are used as a taxpayer's principal residence.

* This stimulus program will reduce a taxpayer's tax bill or increase his or her refund.

* The program is fully refundable which means the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

* Only the purchase of a main home located in the United States will qualify for this program valid until December 2009.

*Vacation homes as well as rental properties are not eligible for this tax credit incentive.

*Taxpayers who owned a home during any time during the three years prior to the purchase are not qualified to take advantage of this program. This means that first-time homebuyers and those who have not owned a home in the past three years prior to a purchase are eligible for the tax credit.

For an eligible purchase in 2009, you are allowed to choose the credit on either your 2008 (or amended 2008 return) or 2009 federal tax return.