More Buyers Qualify for the Home Buyer's Tax Credit

On Friday President Obama signed the extension to the First Time Home Buyer's Tax Credit. The program was set to expire this December 1st, but was given a six-month reprieve and will now end June 30, 2010.

To receive the $8,000 contract buyers must sign a contract by April 30, 2010 and close on the home by June 30, 2010. All of the requirements from the bill's first round still apply, however, now even more homeowners will be eligible. The bill now includes buyers who want to trade up.

The tax-credit for current home owners who sell their home to buy a new one is up to $6,500. This portion of the tax-credit has been deceptively referred to as the "trade up" credit, but actually you don't have to purchase a bigger or more expensive home to qualify.

Who qualifies?
You must have owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. The bill states that the law tests home ownership for both home buyer and his/her spouse.

How much is the credit?
The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.

Is any home eligible?
Purchases of homes priced above $800,000 are not eligible for the tax credit.

As for first-time buyers there are income limit restrictions:
The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

New Construction counts too. If you are having a home built both the first-time or the repeat, can apply for the tax-credit as long as the closing date is by the June 30, 2010 deadline.

For more details regarding the Home Buyers' Tax Credit for both first-time buyers and repeat buyers go to Home Buyer's Tax Credits.

Hey, Where's My Tax Rebate?

On May 2 the media was quick to announce that tax rebates would start showing up in the bank accounts of anyone who signed up for direct deposit. Maybe I just didn't hear the small print, but here it is May 8th and I haven't gotten mine yet. That's because there is a schedule for the distribution and I just happen to have an SSN ending in a high number. So, I'll be waiting until May 16th to see a deposit.

Paper checks won't begin to be sent until May 16th. There are 9 waves of checks being sent. The last batch goes to SSNs ending in 88 through 99 and won't be sent until July 11th. So if you're anxiously awaiting your rebate you can curb your anticipation by checking the IRS Stimulus Payment Schedule.

Once you know your distribution date you can find out more about the rebate status by using the IRS online tool Where's My Stimulus Payment?. If you other have questions such as: you've moved, changed bank accounts, or owe back taxes then you should check out the Stimulus Payment FAQ.

Now that I understand the plan (and I'm so glad I chose direct deposit) I can look forward to for to using part of those fund to get my ceiling fans installed. My plan is to do my small part to stimulate the economy and save on my utility bill this summer. The rest will go in my credit union savings.

Will Paper Rebate Checks go to Spending?

Paper checks for tax rebates start hitting the mailboxes May 9. And retailers are doing their part to ensure that your check goes back into the economy just as the Government intended.

Here's a short list of what's being offered:

• Supervalu parent company of Jewel-Osco and Cub Foods--redeem your check for store gift cards in $300 increments and get an extra $30 (up to 10 percent) added to each card. The offer is available May 2 through July 3.


• Sears Holdings Corp, owner of Sears, Kmart and Lands End, will cash in rebates checks for a gift card in the amount of the check plus 10 percent. The gift cards carry no expiration dates or fees.


• Staples purchases of more than $499 with a Staples credit card, will receive no interest and require no payments for six months.


• Holiday Inn Sunspree's Vacation on the Government Package is $1,200 for a five-night stay for two in Virginia Beach, Va., including breakfast and dinner, a savings of up to $60 per couple per night. (oh, whoo hoo)


• Walmart announced they will cash out checks for free. They’ve also said that they hope to increase sales and pass savings to customers with further price cuts to “key grocery and consumable items” which are listed as shampoo, juice and sports drinks. Funny, when I think of key grocery items I picture bread, milk and rice, which also happen to be the very things that are soaring in price everywhere.

photo by ratterrell

Meanwhile at MSN Money, Liz Pulliam Weston has some interesting arguments against exchanging your rebate for cards. Besides the obvious dislike of gift cards and spending she points out these offers are only from national retailers. Locally run stores can afford such programs and can’t compete for your rebate. Yet they’re being hit hardest right now by numerous economic strains.

Earlier in the year we (and everyone else) polled readers regarding their plans for the tax rebate. Majority said they would use it to paydown debt. But one reader commented with a prediction that big screen TVs would go flying off the shelves. You know I think this reader is right, particularly for the people who chose to take a check over direct deposit.