FIRST TIME HOME BUYER CREDIT
EXTENDED AND EXPANDED
Effective November 6, 2009

Overview
The Worker, Homeownership and Business Assistance Act of 2009 extends and expands the first-time homebuyer credit allowed by the previous law. The new has three main provisions:

1. Extends the deadline for purchase and closing on a home;

2. Authorizes the credit for certain long-term homeowners buying a replacement principal residence; and

3. Substantially raises the income limitations for homeowners claiming the credit.

Deadline Extension
Under the new law, an eligible taxpayer must enter into a binding contract to buy a principal residence on or before April 30, 2010, and close on the home by June 30, 2010.

The credit may be claimed on the taxpayers 2009 or 2010 tax return.

(Note: The requirement that the contract be “binding” implies that any contingencies should be satisfied by the April 30 deadline.)

Certain Long-term Homeowners Eligible
The Law puts in place a credit for up to $6,500 for long-term homeowners who buy a replacement principal residence. They must have lived in the same principal residence for any five-consecutive year period during the eight year period that ended on the date the replacement home was purchased.

Higher Income Limitations
The phase out for individual tax payers is raised from the previous phase-out range of $75,000 - $95,000 of modified adjusted gross income (MAGI) to $125,000 - $145,000. For married filing jointly the phase-out range increases from a MAGI range of $150,000-$170,000 to a range of $225,000 - $245,000.

Young Accounting Services would be pleased to answer any questions you may have about the new law.

Young Accounting Services, Inc.
(704) 541-1512     10801 Johnston Rd., Suite 219, Charlotte, NC  28226     www.youngaccountinginc.com