What is the First Time Home Buyer Tax Credit Extension?
An individual may be able to obtain the first-time homebuyer tax credit if they are regarded as an eligible buyer who has purchased a home as their primary residence in the taxable years of 2008, 2009 or 2010. The eligibility requirements will vary depending on the year of the purchase. Moreover, there are specific benefits attached to the military members or federal employees.
The First Time Home Buyer Tax Credit will reduce the buyer’s tax bill—or increase their refund—depending on the taxes the individual owes. The Internal Revenue Service will refund the credit, even if they own no tax or the credit is more than the taxes owed. Legislation was officially enacted in July of 2010 formally extending the closing deadline from June 30th to September 30th for all eligible home purchasers. Furthermore, legislative alterations that took place in November of 2009 extended the First Time Home Buyer Tax Credit and added documentation requirements for securing the credit.
The American Recovery and Reinvestment Act of 2009 officially enacted the First Time Home Buyer Tax Credit Extension by increasing the credit figure to $8,000 for purchases made in 2009 before the first of December. Additionally, the Worker, Homeownership and Business Assistance Act of 2009 extended the deadline—any taxpayer who purchased a home before May 1st of 2010 is eligible for the First Time Home Buyer Tax Credit Extension—the buyer must have officially closed on the home before September 30th of 2010.