Congress has passed legislation that expands the timeframe and scope of the homebuyer credit; the President’s signature is a foregone conclusion. As you probably know, the first-time homebuyer credit was set to expire November 30^th. Under this program, a first-time homebuyer would be eligible for a refundable tax credit of up to $8,000 on his or her income tax return providing the purchase took place by the program expiration date.

Under the new program, the credit for first-time homebuyers is extended to include purchases made by April 30, 2010. Providing a contract is executed by that date, the closing of the purchase must take place by June 30, 2010 in order to qualify.

Long-time residents, defined as those who have maintained their current home as their primary residence for 5 consecutive years out of the last 8 years, are also eligible to receive a $6,500 tax credit upon the purchase of a subsequent principal residence. The April 30, 2010 contract date and June 30, 2010 closing date apply for this credit as well. Consistent with the prior program, a taxpayer may amend his or her 2009 income tax return to claim the credit even if the qualifying purchase did not take place until 2010.

There are income phase-outs, home price caps, age requirements and other qualifiers that limit the availability these credits, so please be sure to give us a call to make sure your transaction qualifies. The new legislation also includes business tax provisions upon which we will report soon.