FAQ About the Move-Up/Repeat Home Buyer Tax Credit

The passage of the Home Buyers Tax Credit Extension with the addition of existing home owners being able to participate too has many people asking questions.

I'll try to answer as many as I can in this FAQ and also provide you with some links to additional information and forms.

• Who is eligible to claim the $6,500 tax credit?
  Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.
  
• What is the definition of a move-up or repeat home buyer?
  The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
  
• How is the amount of the tax credit determined?
  The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.
  Are there any income limits for claiming the tax credit?Yes. 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.

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