State and Federal homebuyer tax credits

By AJC Staff

If you are purchasing a new home this year, you may be entitled to a sizeable tax credit. The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

In Georgia, House Bill 261 provides a tax credit for buyers of eligible single family residences who close between June 1st and November 30th of 2009. The tax credit will be for 1.2% of the purchase price, with a maximum credit of $1,800 (whichever is less). The Georgia credit is claimed in increments of one-third over a three-year period.

For those that have been previous home owners, take note that the federal law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. The Georgia tax credit is not restricted to first-time homebuyers, but open to "all purchasers of an eligible single family residence in Georgia that file a Georgia income tax return."

There are income limits which impact eligibility for the federal tax credit (the income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return), but there are no income limits with the state of Georgia tax credit.

More good news. The two credits can be combined if you are eligible for each of them.

Refer to the links above to view the details of each tax credit and see if you are eligible.