Obama signs expanded Home Buyers Tax Credit

Expanded Tax Credit Changes

Effective for all purchases after November 6, 2009

Homes must be "under a binding contract" before May 1, 2010. Home buyers have till June 30 to close on property.

First-time Buyer: May not have owned a principal residence for 3 years prior to purchase. Maximum tax credit is 10% of the home purchase price or $8,000, whichever is less.

Current Homeowner: An individual (and, if married, an individual's spouse) who has owned and used the same residence as a principal residence for any 5-consecutive-year period during the 8 year period ending on the date of the purchase of a new principal home will be eligible for a $6,500 tax credit ($3,250 married filing separate).

Income limitation has been raised from $75,000 to $125,000 for single filers and $125,000 to $225,000 for joint filers. The credit decreases for buyers who earn between $125,000 and $145,000 for single filers and between $225,000 and $245,000 for home buyers filing jointly.

Home purchase cap of $800,000 (no cap in previous version).

Special exemptions and extensions for military, members of the Foreign Service of the United States, and employees of the intelligence community: If such individual serves on official extended duty outside of the United States for at least 90 days between December 31, 2009 and May 1, 2010 the deadline for entering into a binding contract to purchase a home will be extended to April 30, 2011. Closing must be before July 1, 2011.

No recapture clause.

Credit is only available to purchasers who are at least 18 years old.

This version now requires that the home purchaser attach a properly executed copy of the settlement statement used to complete the purchase to the tax return.

If you purchased a home between January 1, 2009 and November 6, 2009 you will fall under the original tax credit guidelines.