As part of the newest stimulus plan that was recently signed into law, Congress has created a new, temporary federal income tax credit to provide an incentive for first-time homebuyers. The highlights of this federal tax credit are as follows:
The amount of the federal tax credit is for 10% of the cost of the home, up to a maximum credit of $8,000. As opposed to the incentive of 2008 which in essence, was an interest-free loan that had to be paid back over the next 15 years, this tax credit is a one time credit on either the 2008 or 2009 tax return, given that the home buyer stays in the house for at least three years.  
Eligibility is for first-time homebuyers only. In this case, a first-time homebuyer is defined as an individual who has not owned a primary home at any time during the past three years, but who may have done so previously.  Although income limits do apply, the amount of the credit is the same for all taxpayers, married or single.  The credit begins to phase out for buyers who make more than $75,000 individually or $150,000 as a couple.
Individuals with incomes between $75,001 and 94,999 (single) or $150,001 and $169,999 (joint returns) are eligible for a partial tax credit.
Individuals with incomes greater than $95,000 (single) or $170,000 (joint return) are not eligible for this tax credit.
The federal income credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home from January 1, 2009 through December 1, 2009. Individuals should consult a professional tax advisor for exact tax calculations.
Please visit www.federalhousingtaxcredit.com for more information and Frequently Asked Questions or contact Connie Townsend at 714-333-9090.