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U.S. Military Gets Special Deal In New $8,000 Tax Credit Act

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Signed into law on November 6,2009, the new Act extends and expands the first-time homebuyer credit allowed by previous Acts including these provisions;

You have an extra year to buy a home-until April 30, 2011

"Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual's spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010."

3 Year Principal Residence Requirement Can Be Waived

Buyers using the tax credit do NOT have to pay any portion back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase, but there are exceptions for military and some Federal employees. According to the IRS;

"In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer's principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual's spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer's principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period."

For more details on this program, including links to IRS Tax Credit information, instructional videos and other valuable resources, please visit the Real Estate of Atlanta 2010 Tax Credit Guide or email us at TaxCreditGuide@RealEstateOfAtlanta.com.