Clarifing the Tax Credit

I have heard from a lot of people with questions regarding the "$8k Tax Credit" and there appear to be many misconceptions.

First, let's look at the total amount that is available. While we tend to refer to it as an $8k credit, it is actually up to $8k. The credit is 10 percent of the purchase price of the home, up to $8k. So, if you qualify and you purchase a $70k home then you would actually only receive $7k.

Regardless of what you've heard, this is not only available to first time home buyers. It is intended for anyone who hasn't owned a home for the last three years. If you are married and your spouse owns a home or if you have co-signed for a home, you may not qualify.

Also, to keep the credit, homeowners must use the home as their primary residence for three years.

The credit is phased out for single filers with a modified gross adjusted income of more than $75,000 a year and married couples filing jointly with incomes above $150,000.

One of the most important things to remember at this time is that the puchase must occur before December 1, 2009.

To see if you qualify please consult your tax advisor or you can visit www.irs.gov.