If you are a Massachusetts resident and are thinking about buying your first home, you may be eligible for a tax credit under the American Recovery and Reinvestment Act of 2009. If eligible, you can receive a tax credit equivalent to 10 percent of the home’s price up to a maximum of $8,000. This great opportunity expires soon, so here’s what you need to know:
Eligibility:
- You must close on a home between January 1st and November 30th, 2009.
- You and/or your spouse cannot have owned a principal residence in the past three years prior to purchase.
- Your income must be $75,000 or less if you are single or $150,000 or less if you are married.
Terms:
- The tax credit will not have to be paid back as long as you reside in the purchased residence for at least three years after the purchasing date.
- You must file the credit on your tax return in order to claim it.
- The credit is claimed by filling out Form 5405.
- If you owe less than $8,000 in total taxes, you will receive a government refund.
MassHousing and some other state housing finance agencies and non-profit organizations can assist you by supplying short-terms loans to allow you to access the tax credit money before filing 2009 tax returns. Homebuyers will have principal and interest payments on these loans deferred until the loan due date of June 1, 2010. If not repaid on time, the loan will be amortized for 10 years at the same interest rate of your first mortgage loan. (For more information call 888.843.6432 or visit www.masshousing.com).
For additional information, visit the IRS Information Center.
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