|
HOMEBUYER TAX CREDIT
|
FEDERAL
|
CALIFORNIA
(funds no longer available)
|
| Amount of Tax Credit |
10% of purchase price not to exceed $8,000. |
5% of purchase price, not to exceed $10,000. Maximum tax credit for all taxpayers is $100 million to be allocated on a first-come, first‑served basis. |
| Principal Residence |
Yes. Property purchased must be the taxpayer’s principal residence which is generally the home the taxpayer lives in most of the time (26 U.S.C. § 121). |
Yes. Property purchased must be a qualified principal residence and eligible for the homeowner’s exemption from property taxes (Cal. Tax & Rev. Code § 218). |
| Type of Property |
House, condominium, townhome, manufactured home, apartment cooperative, houseboat, houstrailer, or other type of property located in the U.S. |
Single-family residence, whether detached or attached, condominium, cooperative project unit, houseboat, manufactured home, or mobilehome. |
| First-time Homebuyer |
Yes. The buyer (and buyer’s spouse if any) must not have owned a principal residence during the three-year period before date of purchase. |
No. The buyer need not be a first-time homebuyer. |
| Unoccupied Property |
No. Property may have been previously occupied or not. |
Yes. Property must have never been previously occupied as certified by the seller. |
| Minimum Occupancy Requirement |
Must be the buyer’s principal residence for 36 months after purchase, otherwise credit must be repaid. |
Must be the buyer’s principal residence for 2 years after purchase, otherwise credit must be repaid. |
| Income Restriction |
Yes. Tax credit begins to phase out if modified adjusted gross income is over $75,000 (or $150,000 for joint filers). No tax credit at all if modified adjusted gross income is over $95,000 (or $170,000 for joint filers). |
No. |
| Date of Purchase |
January 1, 2009 to November 30, 2009, inclusive.
(Note: A repayable $7,500 tax credit is available for purchases from April 9, 2008 to December 31, 2008.)
|
March 1, 2009 to February 28, 2010, unless $100 million funding runs out. |
| Refundable |
Yes. Any amount of the tax credit not used to reduce the tax owed may be added to the taxpayer’s tax refund check. |
No. |
| Repayment |
The buyer need not repay the tax credit if the buyer owns and occupies the property for at least 36 months after the purchase. |
The buyer need not repay the tax credit if the buyer owns and occupies the property for at least two years immediately following the purchase. |
Multiple Buyers
(not married to each other) |
The $8,000 tax credit may be allocated between eligible taxpayers in any reasonable manner. Click here for an explanation with examples: Federal Homebuyers Tax Credit Allocation Unmarried Persons. |
The $10,000 tax credit may be allocated between eligible taxpayers based on their percentage of ownership. |
| Maximum Credit for All Taxpayers |
N/A |
$100 million. |
| When to Claim |
Full tax credit may be claimed on 2008 or 2009 tax returns. |
1/3 of total tax credit may be claimed each year for 3 successive years (e.g. $3,333 for 2009, $3,333 for 2010, and $3,333 for 2011). |
| Tax Agency |
Internal Revenue Service (IRS). |
Franchise Tax Board (FTB). |
| How to File |
First-Time Homebuyer Credit
(IRS Form 5405) to be filed with 2008 or 2009 tax returns
|
Specific procedure for claiming credit includes completing an Application for New Home Credit (FTB Form 3528-A). |
| When to File Form |
Form 5405 must be filed with 2008 or 2009 tax returns. |
FTB Form 3528-A must be faxed by escrow to the FTB within one week after close of escrow and filed with the buyer’s 2009 or 2010 tax returns. |
| Exceptions |
Acquisitions by gift or inheritance, acquisitions from related persons as defined, and buyers who are nonresident aliens. |
Credit allowed is not a business credit under Cal. Tax & Rev. Code § 17039.2. |
| Legal Authority |
26 U.S.C. section 36. |
Cal. Rev. & Tax Code section 17059 (as amended by Senate Bill 15). |
| Date of Enactment |
February 17, 2009. |
February 20, 2009. |
| More Information |
IRS Web site |
FTB Web site at which includes a tally of the $100 million original funding that is still available.
|
