As a potential new, first-time homebuyer I have taken great interest in the proposals included in the proposed stimulus package – in particular as it relates to incentives to purchase homes. After spending a great deal of time reviewing the proposed $15,000 Homebuyer Tax Credit I have reached the conclusion that it is NOT really a $15,000 credit for an average citizen.
First, I’ll give you some of the details. The proposed legislation would offer a credit of up to 10% of a primary residence purchase price, up to $15,000. The credit would be applicable for home purchases made from the date of enactment to one year thereafter and would sunset the current $7,500 refundable tax credit for first-time homebuyers on the date of enactment. The credit could also be claimed on 2008 taxes.
The drawback of this legislation is the limitation based on amount of tax liability in a given year, something that did not exist in the original first-time homebuyer credit. Let’s run through an average, simplified example:
John and Jane, who have one child and file a joint return, purchase a $160,000 house and generate an annual income equal to the 2006 U.S. median family income, $58,407 according to the U.S. Census Bureau. They do not itemize their deductions and claim three exemptions, thus reducing their taxable income to $37,007. Their total tax would then be $3,751 after subtracting the $1,000 child tax credit.
The limitation based on amount of tax liability means in 2008 John and Jane could not claim a $15,000 credit on their home purchase, rather only a $3,751 credit! The legislation does allow you to split this over two years meaning they could take an additional $3,751 in 2009 if all else remained equal. In total, the tax credit is only $7,502!
In my opinion, a $15,000 credit for all home buyers sounds great, but don’t start planning a major renovation anytime soon. To take the full credit you essentially have to make over $80,000 – or $100,000 if you want to take it in one year.
Note: The author of this post is not an accountant and is not providing tax or legal advice. The author makes not claims that the post is accurate or calculated correctly. For specifics regarding your own situation, contact a qualified tax professional.
Sources:
U.S. Census Bureau
Text of Amendment
Related posts:
So, lets say a married couple file together with a combined income of $55,000. The wife’s 10k earnings had tax with held by her employer. The husband had a schedule k with a net loss of $80,000 to his 45k income. So, he owes the government no money. In fact the couple will probably get a slight refund of some of the money his wife put in. Does this mean if they bought a house after the bill passes, they would get little to no money back from the stimulus package?
Would the $7500 tax credit to be paid back be better if they need cash in hand?
Thanks for the info. I’ve been reading that the credit is applied towards one’s tax liability. Let’s say that I make x amount of money a year and each paycheck tax taken out. By tax time, I have paid $5000 in taxes but still own $2000 more. So will the tax credit zero out my tax debt and I get back $5000, or will I just not owe the $2000 tax bill for that year?
Looks like Joe & I have similar questions. Thoughts anyone?
So if my husband and I close on a house on February 20th, and the $15,000 credit goes in to effect before then, would I be able to claim the credit on my 2008 refund, which I haven’t filed yet? I was able to do that with the $7500 credit. Are they going to let you do that with the new credit also?
Joe, take the loan you’ll get nothing from this bill. Nick, you’ll be getting a check for 5000 this year and next. Enjoy.
Nick:
Your liability is your total tax. It doesn’t matter how much was withheld during the year. In your example, your liability is $7000. If you had $9000 withheld and would otherwise get a refund of $2000, your liability is $7000. Similarly, if you had $5000 withheld and would otherwise owe an additional $2000, your liability is $7000. If you buy a house under this proposal, you could get a credit of $7000 and reduce your liability to zero. You would get a refund of all that had been withheld, either the $9000 or the $5000.
Joe wouldn’t get anything back, no tax liability as the schedule K pretty much wipes out everything. Nick on the other hand would receive a full benefit of $7,000 and would get $5,000 back.
Will the $7500 loan be available even after they pass this new bill?
Joe,
No, the current first time homebuyer credit would be sunset when the stimulus is enacted.
Wow…a lot of information floating around about this one. Maybe someone can guide me a bit here. My wife and I had a total income in 2008 of about 65k (gross). Just did my 2008 taxes and I am getting 2000 back. So lets say everything pretty much stays the same for 2009, but I buy a 150,000 house in June. What happens? What do I get / Not get???
Ray,
As proposed, the first thing you could do is amend your 2008 return to claim the credit as soon as possible. You would then essentially receive back what you paid in taxes for the year, up to $15,000. Then when you do your 2009 return, you would also get back what you paid in as long as the total of the two years does not exceed $15,000.
I have done a lot of research on this, and this is ONE of the better articles – Ray – you would be eligible for $15,000 in tax credit over the next two years. What you would receive has nothing to do with your refund – it is what your total tax liability is. Let’s say you paid $7000 in taxes throughout 2008 – and when you did your taxes, you realized you only owed $5000, which is why you get a $2000 refund. The new tax credit would basically wipe out what you owe in taxes, meaning you would not even owe the $5000, so your refund would be $7000.
If you are someone who TRULY doesn’t pay taxes (meaning you are not working) you would get NOTHING. If you get money withheld from your paycheck, you would end up getting that back, provided your total paid in not over $15,000.
Good write up. People really need to understand this, and you can actually use it to your advantage to start saving (or buffering) your down payment.
I am actually going to work on Monday and changing my allowances to lower my withholding amount (and if not approved will obviously change it back ASAP).
Here’s my situation if anyone cares:
2009 Income Guesstimate of 84,000
2009 Bonus Income Guesstimate of 8000
1 Dependant
1 Child Care Credit
1 Child Under other Credits ($6000 / Yr cost for day care)
That leaves my tax liability at about the 12,000 range. So far i’ve paid 1500 in federal taxes, and would change my allowances on my w-4 to some outrageous amount (probably 14 – 16). If you didn’t buy a house under this credit, be aware you’d have quite a few penalties if you didn’t change it back ASAP.
The people that benefit are the people that have an AVERAGE tax liability of 7,500 / year.
You should do a w-4 calculator just to get your “estimated” liability amount. You can also play with it to decide what your allowances should be if you decide on buying and want to work on getting a down payment.
Of as stated before, you can keep your taxes as they are and just get a fatty refund in the amount of your tax liability / what you’ve paid etc etc (just read the above comments).
I am a going to be buying a new home on April 1rst. My question to everyone is, WILL I BE ABLE TO GET BOTH THE $7,500 CREDIT (0% interest loan) and the current $15,000 tax credit if the bill gets passed? If someone would be so kind to answer my question, I would greatly appreciate it.
Casey,
The proposed amendment would sunset the $7,500 credit on the day the stimulus is enacted. My interpretation of this is that those who closed on their home prior to the date of enactment and qualified for the original $7,500 first time home buyer credit would indeed receive it. I don’t know about repayment provisions as the house version of the stimulus eliminated the repayment.
I just read the amendment trying to understand the tax liability part, but it refers to other sections and paragraphs. Can someone tell me where to find the text of the sections it is referring to?
I’m not sure if it is just your tax liability you get back?? I’m in a lower tax bracket paying only a couple thousand in taxes, but I would buy a house if I could get the entire $15K back. Another thing is my parents are willing to co-sign for me on the loan (one medical collection kept me from getting approval on my own) so, my other question is would I qualify for the credit if I have a co-signer on a FHA loan. It would be my primary residence, but not my parents….
Any thoughts would be appreciated!!
Does anyone know when the $15,000 tax credit stimulus will start. I have seen H&R Block adds saying it was for homes purchased after April 8th… I close on my new house March 30th and this is not my first home purchase so I don’t qualify for the $7500 credit and I don’t want to miss out on this tax credit if it is a mater of days.. Does anyone have a date this should come into effect?
Well there is the problem with our economy…people like John and Jane who make less than 60k trying to buy a 160,000 dollar home…
Stop calling it a first-time buyer credit! its no longer restricted to first time buyers. As long as it is your primary residence for at least 2 years you can qualify.
@Courtney
Explain to me how this is a problem, Courtney..
Just called H&R block, seemed they hadnt really read up on these sites or these forums are wrong in their statements. They were saying the new home $7500 credit cant be applied to 2008 since i bought my home Jan 30th 2009(I think they are wrong on that one). Then they say the $15k is something you work out with the IRS to negate your taxes you owed through the year and then how much that is, say 3500, you claim that next year as income.
All I wanted to really know is, if the new stimulus gets past, and it is not back dated to the begining of the year, and I havnt amended my 2008 tax return, am I going to loose out all together. ie., not get the $7500 “loan” because of the “sunset” rule, and then loose out on the $15k worth of tax credit because I bought my home before the bill was past?
I am hearing from other blogs that there is a down payment requirement for the new ($15k) credit. Can anyone verify this? I’ve been trying to locate the actual language of the bill, but there are so many versions out there…
Melissa the $15K tax credit will start the day of enactment..when the presidents signs it, which has been predicted to be Feb. 16.
Apparently, your credit will only equal your tax liability and nothing more. So, if you think you can buy a house for $150K and get back $15K, you are mistaken. What kind of bonus is that??? How in the heck would that encourage people to buy a home? You would have to make $80-$100 to reap the benefits..and do those people need help?? I think not.
Also, where can i go to read the actual section of the bill that explains the home buyer stimulus. There are so many different stories about what time frames it will effect and if it will get back dated or not. I just dont have the time to run to a tax place like H&R or do my addment myself. I want the 7500 cause that will help me out the most, being military i could go down range and not owe any taxes then I loose out on quite a bit if I fell into the 15k stimulus. If I got the 7500 put on the 2008 tax return and then the bill passes back dating it to 1 Jan 09, what happenes to the 7500 i already recieved? Do i pay it back or can the government put the decision in my hands of what I want and not what they think will help?
Walker,
There is a link in this article to the proposed amendment. Take a look, specifically page 3. To date, I have not seen anything in the proposals that back dates the credit.
Sorry if I am posting to much on here, I am just finding more and more questions cause no one gives the full story,
Yahoo gives out this paragraph on the differences of senate passed bill and what the house wants the bill to say.
Home-buyer credit: The Senate bill would double the size of an existing temporary home buyer credit to $15,000. It would also allow all home buyers to claim it and remove the requirement under current law that the credit be paid back. The House bill also removes the repayment requirement but leaves the credit maximum at $7,500 and would offer it only to first-time buyers.
The question I get is wether the House $7500 bill is applied to the liable taxes owed like the 15k credit, or is it $7500 straight up to new home buyers?
Can some news agency please give us the FULL story and not the highlights. The highlights made this years supper bowl look like a great game, but you needed to see the whole thing to realize how many bad calls and stupidity was associated in the game.
Walker,
I love the Super Bowl analogy. Anyways, the current $7,500 is a refundable credit meaning you can get up to that amount regardless of what your tax liability is. Really the only change the house bill made is the waiver of requirement to repay the current $7,500 credit for first time buyers.
All this is very confusing to me. I bought a home in Oct of 08. Will I have to payback my $7500??? If I do have to pay it back, I find it HIGHLY unfair. I also think this “sunsetting” is crap. I would get more back under the new bill that was just passed. Not much more, but still…a little more. I just want my $7500 and I dont want to pay it back if others do not have to.
So if I qualify for the current $7500 tax credit (loan), when & if the new legislation passes, will I no longer qualify for the $7500 tax credit or the $15000 tax credit (assumming it doesn’t changes).
In other words, should I do my taxes now and get the $7500 tax credit before it has a change to go away? Thanks.
Nick,
It is my belief that if you closed on your house prior to the date of enactment, you still qualify for the $7,500. If it is after that date, it would be the $15,000. Please note with all of this that the bill has not passed and may change if/before it does.
@Tress
My interpretation of the proposal is that you’re only going to get back what your tax liability would be. As for your particular circumstances, Tress, I would work with an accountant or lender on that if the bill were to pass.
@Ryan
It remains a first-time home buyer credit until legislation sunsetting it is passed. As of now, nothing has passed and it remains a first-time home buyer credit.
@Heather
I can’t say I’ve seen anything requiring a down payment.
@Ryan Well, obviously people like you are why the housing market is in such bad shape. If you honestly believe that someone with less than 60k income can afford a 160g house, you have no grasp on reality. Let’s put it this way: John and Jane probably average a weekly pay day of 1150 BEFORE taxes. So they probably bring home 850 after taxes (and that’s assuming they don’t have any insurance, etc. taken out of their check). The payment on a 160,000 dollar house would be 1200 (that’s on the low end). And call me crazy, but the way I see it, you should be able to pay one mortgage payment with one check. So if John and Jane DO have insurance, they basically are going to have to take 2 checks a month to make one mortgage payment. So that leaves about 1300 for the rest of the month. Let’s assume John and Jane have a car payment as well as insurance. That’s a modest car payment of say $200 a month, plus $50. Welp, that leaves them 1050. Now, this is crazy…I know, but say John and Jane like to eat. The average couple probably spends 250 a month on food, and that’s pretty much Ramen noodles and canned greens. So now they’re down to 800. Oh yes, they both have jobs that are about 30 minutes away. There goes 200 bucks a month for gas. So now we’re at 600. WAIT, what about the power, water, cable and phone bill? Ok, after all that, we’ll give them the benefit of the doubt. It’s the end of the month and now they have a whopping 300 bucks at the most in their account. John and Jane live pay check to pay check. John and Jane will probably have a foreclosed home in about 8 months. John and Jane did not purchase a home within their budget.
@Courtney
Well let’s check these numbers…
A $60,000 income would yield a gross monthly of $5,000 and after say 25% in state, federal, social security, and medicare taxes, that leaves $3,750 in net income per month. That’s $350 per month higher than Courtney’s estimates.
A $160,000 with say 5% down at a 6% interest rate would yield a $911 per month mortgage payment. Let’s say $3600 per year in property taxes, insurance, and private mortgage insurance and you’re at $1,211 each month, leaving $2,539 in cash available. That’s $1,200 more than Courtney predicts.
That $2,539 is then up to John and Jane to allocate efficiently and after the rest of the expenses listed, they would have $1,500 in their accounts.
The amount of forclosures in America would suggest that Courtney’s analysis is the one that is more in line with reality.
This is confusing to me I tried to read along and had not luck. My situation is My husband and I bought a house in august. He is going to file our taxes tomorrow claiming the home buyers credit. of 4700.00. We paid 47000.00 for the house. In any case if the bill passes will we still have to pay back the 4700. while others get to keep theres and not pay it back. My husband read on another site that if you take the credit and the bill passes you wont have to pay it back. What would be best for us. An our annual income is 53000.00 Here is the link where my husband read about the non payback in line 4 they use the term was. Any help would be appreciated.
http://www.usnews.com/blogs/the-home-front/2009/02/06/the-15000-home-buying-tax-credit-6-things-to-know.html
Umm…yeah, 1500 pages for the new stimulus bill, that is why the news coverage is so vague, they dont want to bore us with the full days reading on the bill. lol
Ok, I will give you something to read, http://readthestimulus.org/wandmstim.pdf
Subsection 1301 of the House bill proposed for the tax credit. Simply put, the $7500 for homes purchased AFTER 31 Dec 2008 and BEFORE 1 July 2009, the payback stipulation is waived. That is $7500 or 10% of the home, what ever is less, free and clear for first time home buyers and WILL NOT be paid back. That is the only thing that is mentioned for the bill, the repayment will be waived but the rest of the stipulations applied, staying in the home for a set amount of time, principle resedence, yada yada yada. I will go back and read the new version of the senate bill when i have time. My hopes are for the House version of the bill to pass
@The FundPicker
Once again, someone who is completely out of touch with reality. I seriously have no idea where you are getting your numbers from. My husband and I have a gross monthly income of about 5720.00. Considering that we make more than 60 grand a year, I say your numbers are off. Even so, after taxes and insurance, our monthly net income is about 2500…NOW WHERE near your projected estimate of 3750.00. With that being said, I don’t feel the need to go through it all again. You can figure out the difference. Also, with their income, it’s HIGHLY unlikely that John and Jane would pay 5% down. And I’m so glad that you can use an online mortgage calculator to come up with the $911 payment. I do see you have forgotten to add in the PMI. That’s required until you pay 20% of the house. So on a low end, that’s an additional $125.00 bucks. So now their payment is back up to about $1,040.00.
It’s no offense to you. John and Jane just don’t seem to know how to live realistically. Therefore, if everyone else keeps the same mind set as you do, then no matter what we get from the government, we will always be in this situation. As I said, my husband and I make over the 60,000 median income and we just purchased our home for 114. Yes, we were approved for over 200,000. Obviously unrealistic loan officers work at the bank too.
@Courtney
Sorry- NO WHERE near your projected blah blah blah is what I meant…
@Courtney One more thing, I’m retarded and typed that our net income a month is about 2500. I actually meant about 3500. And being that we make well over 60 a year, the 3750 that fundpicker estimated is still in fact NO WHERE close to what it should be. And I did see where you added the PMI in. Sorry about that. I’m in a rush…you know, sitting here at work trying to earn my money so I can actually close on the house I’m buying. Either way, whether you believe it or not, it’s stupid to live outside of your means. And someone who brings home less than 4000 a month CANNOT afford a mortgage payment of 1200 a month. Simple as that. No one lives so strictly that they could afford that. We all like little pleasures in life such as going out to eat, or wearing nice clothes. And if John and Jane actually have even ONE child and seriously try to do this, they’re screwed.
I sure who every you are, if you think you know something about numbers, someone else can screw the same numbers to show the answer to be some thing else. In finance 2+2 doesnt always equal 4. but to a bank, they can try to make it seem like 2+2=6 if they can squeeze another 2 from you. The “rich” always want your money if they can figure out how to get it from you. except bill gates, cudos to him, he finnally said he has enough.
@Courtney
Without a doubt John and Jane’s budget gets stretched, but it could be affordable for the right people in the right circumstances.
If it’s highly unlikely that they pay 5% down, their monthly payments are reduced even further. And private mortgage insurance was specifically referenced. Look at it this way, CONSERVATIVE lending would lead to a 28% housing-to-income ratio or $1,400 per month.
The cause of this mess is not John and Jane’s situation, it’s the person that used exotic mortgages to allow someone making $60,000 per year to afford a $250,000. They were stretched with in that scenario then as rates reset they couldn’t afford those monthly payments.
COPY AND EDIT THIS LETTER, SEND IT TO THE STIMULUS CONFERENCE COMMITTEE MEMBERS (EDIT MY INFO OUT AND REPLACE WITH YOURS FIRST):
Dear Senator :
I write today to thank Congress for its hard work on a much needed stimulus package and to express my concern about the $15,000 tax credit for home buyers.
Last week, Senator Isakson’s amendment to the stimulus replaced a $7,500 refundable tax credit with a $15,000 non-refundable one. The amendment is designed to encourage home purchases by higher-income households with a reduced risk of default. What the amendment fails to do is encourage purchases by those of us who are responsible and credit-worthy, but whose tax liability is nowhere near $15,000. Even the provision that allows tax payers to spread the credit evenly between two years is insufficient, as many of us have liabilities that are still only half the allowable credit. To make this incentive truly work for the American people and the American economy, the $15,000 credit must be made fully refundable to credit-worthy homebuyers at or above a certain income level.
In my own case, I work in the education field, which is not well known for its high salaries. Despite this, I have waited and saved been frugal with my spending for some years so I might purchase a home. In March, I will close on a foreclosed property in my hometown. My new home will need much work, as many foreclosures do. In most cases, the purchase of a home is the largest investment an individual will make in his or her lifetime. The spending that goes with it – spending for furnishings, improvements, renovations, maintenance, and appliances – infuses the economy with thousands of dollars per home.
Passage of the current bill will reduce my tax refund by $3,500 over the current incentive. That doesn’t make me excited to go out and spend. I could only dream of making enough money to recoup the entire credit in this bill, but what does it say to give a full $15,000 refund to someone making $122,000 a year, but less than a third of that amount to someone like me? Does that individual need the money more? Will they actually spend much of their refund? Is it sending the right message to the true middle class? I’m not sure I can answer those questions, but I know that if Congress gave $15,000 to an individual making $45,000 a year, they would put it to good use!
By making the $15,000 credit fully refundable would allow me and others like me to stimulate the economy with purchases of furniture, equipment, hardware, and create jobs in areas like maintenance, pest control, landscaping, construction, plumbing, and contracting. In my home alone, there is a laundry list of improvements that need to be made, totaling nearly $17,000. By refunding Senator Isakson’s tax credit, the entire amount would be circulated into the economy. Without it, me and homebuyers like me will likely stash what little we qualify for away.
Many see this credit as a windfall for undeserving or wealthy homebuyers. Currently, it is. By refunding the entire portion, it really becomes a windfall for the sectors of our economy that need it most. Help us to improve our lives while improving the economy by making the $15,000 homebuyer’s tax credit refundable.
Thank you for your consideration,
@The FundPicker
Why would their monthly payments be reduced even further if they didn’t put 5% down?? And why should it be the loan officer’s job to tell someone what they can and can’t afford? We’re all adults and if we’re capable of actually making 60 grand + a year, then I’m assuming we’re at least intelligent enough to handle our own finances and realize that living pay check to pay check is simply not a good idea.
Their monthly payments are reduced because current lending standards, outside of an FHA loan at 3.5%, dictate that you can’t put down less than 5%.
If, as you’re saying, that the example is so incredibly unaffordable it’s even more of a reason that the $15,000 credit is too good to be true. The example is an average family buying a home that would get them just over the 10%/$15,000 threshold.
@The FundPicker
I have to agree with Courtney that John & Jane are not within their budget. We grossed over $75000 last year and are in a contract to purchase a $17000 home. With 3.5% down and debt besides small student loans I am nervous about how tight our budget is. John & Jane should be worried (unless they have a $10000 emergency fund saved somewhere to rely on). Granted, the $15000 would make me less nervous.
@The FundPicker
Not true…there is a rural housing loan which states you don’t have to put anything down. However, with the fee you have to pay for this particular loan added on to your monthly payments, it is still going to be the same estimated payments we have stated before.
So, are you saying the 15,000 credit IS too good to be true? It’s not necessarily a bad thing. I mean, no one truly has to take it….and it’s better than what we’ve had before (nothing…). Granted, I believe the 7500 is a much better deal for lower incomes. Anything I’ve read says you have to make about 100 a year just to receive the full benefits of the 15000. I agree with this. I think we’ll get about 7 grand…which is less than the 7500 available now. I am hoping the bill doesn’t pass until after we close on our home. It is all dependant upon your tax liability. It’s not based on what you paid in throughout the year. Let’s say I paid in 3500 this past year. Also, let’s say I get a 1000 dollar refund. This means my tax liability is 2500. That’s what I get back.
OK. I’m Self-Employed. Before the many legal deduction that I’m allowed to deduct I make in the 50′s, but my adjusted when it is all said and done will be closer to 25-32. I always pay taxes quarterly, I never get a return. I have already paid $3400, and expect to pay another $1700 once I file. Based on tax liability, does this mean I will only get a check for $5100? Can I file it again in 09 based on my liability? If this is correct, then its a joke, because it would be better to buy before it passed and get the $7500 and not have to pay it back. All this thing would be doing is refund what you already paid or have paid. Can anyone help?
@Tim
With the current suggestions regarding the 15000 credit that hasn’t passed yet, that is correct. However, the current 7500 that is available DOES have to be repaid since nothing has actually passed. So essentially, all that’s happening right now is the money that is already owed to you is being refunded earlier.
You could file again in 2009 but you would only get the remainder of what’s owed to you- 10% of the purchase price of the house up to 15000.00. Again, based on your tax liability. If nothing changed as far as your work/income, your tax liability would be 5100 again so you would only get back 10,200 all together (assuming the house you bought is 102,000 or more) of the full 15000.00.
@Courtney
And adding to the confusion is in the house version of the stimulus package, they voted to remove the requirement to repay the $7500 first time homebuyer credit. Assuming the stimulus package passes the senate today, the house and senate will then work to reconcile their differences. What comes of that is anyones guess.
It is true that in the long run, this package will help a lot of people. However, we are buying a foreclosure. I would MUCH rather have 7500 bucks in hand and even having to pay that back would be fine THAN having to spread out a payment over 2 years. Although we’d get more money that way, we wouldn’t get it all at once.
The very first sentence under limitation states, “In a tax year to which section 26(a)(2) does not apply” Everything seems to rest on what 26(a)(2) is, because if it doesn’t apply then the limitation kicks in, but only if 26(a)(2), what that is, does not apply to the tax year. Does anyone know or understand this?
My example is from a military point of view. I would love the $7500 because with the way I get paid, non-taxable income and all, it looks like I only get paid about $33k a year then the AGI is 11k due to wife a 1 kid. I owed 1,100 this year in liablity. I just changed stations to a place I can afford a home and was allowed to purchase a 109k home due to my 50k GROSS income with the non-taxable incume included. If that seems like alot, that is the military and we are still hiring for anyone that needs a job for the next 4-6 years and meets certain requirments.
. I will fall greatly short of the 15k or the $10,900 that this bill will grant me to have. I am not the only one in this boat, the military will have shuffled thousands of people around between April 2008 and when ever this stimulus is supposed to end. Some of witch will purchse homes and others will rent. What kind of help is the 15k bill going to really do for us service folks? What happens when some of us that buy homes get deployed and we get ZERO tax liability? $7500 weather we have to pay it back or not sounds great anyway we look at it.
@Tim
Tim,
Very simply, 26(a)(2) says the same things that are said lower in the amendment.
(2) Special rule for taxable years 2000 through 2006
For purposes of any taxable year beginning during 2000, 2001, 2002, 2003, 2004, 2005, or 2006, the aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the sum of—
(A) the taxpayer’s regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27 (a), and
(B) the tax imposed by section 55 (a) for the taxable year.
Folks, there is a very easy to understand chart at the National Association of Realtors website under government affairs. Are some people here actually complaining about having a ZERO federal tax liability?
Not really to complain, but what if you are working every day 40 hrs a week plus for a job you should be making 2 to 3 times as much, and you feel like staying in the service of your country, and the country ignores you? I fullfil my obligation, I do my job, my money goes out to the comunity around the base/post, just commenting on a package for the working people of this nation that buy a home. just that the 15k bill still doesnt make a good argument for the real middle income americans.
so the bill passed and i was wondering is it a definite that i will get to keep the 4700 that i took for the first time home buyers credit. and will it affect the 1000 he is suppose to be giving to middle class familys. Also anyone know anything about the 2500 dollar he is giving for education will it be available if you are paying for a vocational school for nursing. Thanks and sorry about all the questions.
The bill has passed the Senate, barely. Next the House and Senate will work together to reconcile their differences, then send the bill to President Obama. Nothing in the bills are definite yet.
Once again, the poor man is screwed! You first had to buy the home between a ridiculous date and then they raise the “crdit” to a amount where you have to be “well-off” to get it (God firbid if you lose your job), and then take away what some would gladly take as an interest free loan even still. I was going to consider the “loan” but now I guess I had better just go ahead and take anything “credit” I can get as a first time home buyer!