Created on July 16, 2010 - 11:44pm

Equus’ Chris Munzke, CPA GMS discusses the updates made to the First-Time Homebuyer Tax Credit by the “Worker, Homeownership, and Business Assistance Act of 2009” and the “Homebuyer Assistance and Improvement Act of 2010.”

In my July 1, 2009 blog, I discussed the impact of relocation on the 2009 First-Time Homebuyer Tax Credit. Please refer to that blog if you wish to review the details of how the homebuyer credit worked prior to November 7, 2009, as well as its impact on relocation. The focus of this blog is the changes made to the homebuyer credit since then. The Worker, Homeownership, and Business Assistance Act of 2009 makes four important changes to the credit:

1. Deadline extended for the homebuyer credit. The homebuyer credit is extended to apply to a principal residence bought before May 1, 2010. The homebuyer credit also applies to a principal residence bought before July 1, 2010 by a person who enters into a written binding contract before May 1, 2010, to close on the purchase of the principal residence before July 1, 2010. The Homebuyer Assistance and Improvement Act of 2010 extended the closing deadline from June 30 to September 30, 2010 for any eligible homebuyer who entered into a binding purchase contract on or before April 30, 2010.
2. The homebuyer credit may be claimed by existing homeowners who are “long-time residents." For purchases after November 6, 2009, you can claim the homebuyer credit if you (and, if married, your spouse) maintained the same principal residence for any 5-consecutive year period during the 8-years ending on the date that you buy the subsequent principal residence. The maximum allowable homebuyer credit for qualifying existing homeowners is $6,500 ($3,250 for a married individual filing separately), or 10% of the purchase price of the subsequent principal residence, whichever is less.
3. The homebuyer credit is available to higher income taxpayers. For purchases after November 6, 2009, the homebuyer credit phases out over much higher modified AGI levels. For individuals, the phase-out range is between $125,000 and $145,000, and for those filing a joint return, it’s between $225,000 and $245,000.
4. There’s a new home price limit for the homebuyer credit. For purchases after November 6, 2009, the homebuyer credit cannot be claimed for a home if its purchase price exceeds $800,000.

About Equus Software
Founded in 1999, Equus offers software solutions for all aspects of workforce mobility - from U.S. domestic tax gross-up and relocation operations to comprehensive international assignment management. Equus is the undisputed leader in corporate mobility software, with over 100,000 employee relocations entrusted to Equus' software products each year. Software innovation and unmatched customer support have made Equus the intelligent move for employee relocation and assignment management worldwide.

CONTACT:
Chris Munzke, CPA GMS
Equus Software
(303) 292-4200
cmunzke@equusoft.com
http://www.equusoft.com