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Income restrictions for First-Time Homebuyers Credit

E-mail|Link Posted by Andrew Chan October 5, 2009 10:00 AM

Does the $8,000 first time tax credit have any income restrictions, and when does the offer end. I have heard two dates, Nov 30th and Dec 30th, what is the real deal. Under contract or closed?

In order to be eligible for the $8,000 First-Time Homebuyers Tax Credit for purchases made in 2009, your modified adjusted gross income (MAGI) cannot exceed $95,000 dollars if you are a single taxpayer and $170,000 if you are married filing jointly. If your MAGI is between $75,000 and $95,000 dollars for single taxpayers or between $150,000 dollars and $170,000 dollars for married taxpayers filing jointly, you would be eligible for a portion of the total credit based on the actual amount of your MAGI.

First-time homebuyers have until December 1, 2009 to purchase and close on a home to qualify for this credit. Therefore, if you signed a contract to purchase a home but do not close before Dec. 1, you would not qualify for the credit.

Visit the IRS’ web site at http://www.irs.gov/newsroom/article/0,,id=204671,00.html for more information about the First-Time Homebuyer Tax Credit.

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Jill Boynton is co-founder of Cornerstone Financial Planning in Newington, N.H. Along with traditional financial planning services, Boynton provides analysis specifically for divorce.

Andrew Chan is the founder of Integrative Financial Advisors in Framingham. He provides comprehensive financial planning advice and investment management services. He has been an adviser for over 12 years and works with clients to integrate all aspects of their finances including investments, retirement, education funding, and tax planning.

Cheryl Costa is a managing director at AFW Wealth Advisors, which has offices in Natick and Purchase, N.Y. She advises clients on investing, education funding, and estate planning. She holds a master’s in business administration from Boston University.

Jamie Downey has been an accountant for more than 14 years. He's a partner at Downey & Co. in Braintree. Prior to joining the firm, he served as a manager in the audit department of accounting firm KPMG.