Home Buyer Tax Credit for Military
In an effort to stimulate economic growth and home ownership, President Obama signed the Worker, Home Ownership, and Business Assistance Act of 2009 into law (on Nov.6 2009) which extended the first-time homebuyer tax credit deadline to April 30, 2010 (to April 30, 2011 for military personnel), and expanded the credit to include qualified current homeowners.
As a qualified service member (i.e., members of the military and foreign service and intelligence communities eligible under tax credit provisions), the Home Buyer Tax Credit offers two (2) special benefits:
(1) YOU HAVE AN EXTRA YEAR TO PURCHASE A HOME
Home buyers must meet the April 30, 2010 deadline to be eligible for the tax credit. However, service members who are serving (or have served) overseas on "official extended duty" for at least 90 days during a specified period (Jan 1, 2009 - Apr 30, 2010) have until April 30, 2011 to purchase their homes. Also, a 60-day extension to close is allowed (i.e., may close on or before June 30, 2011) if a binding contract is in place prior to the April 30th deadline.
(2) YOU DON'T HAVE TO PAY BACK CREDIT (under the 3-year Occupancy Requirement)
Home buyers have to repay the credit if they live in their primary residence less than 3 years; however, qualified service members are exempt from this occupancy requirement. They do not have to repay the credit even if they have to sell their home in less than three years occupancy, as long as it due to official business.
HOME BUYER TAX CREDIT FOR MILITARY CHART
The following chart provides an "At-A-Glance" look at the Home Buyer Tax Credit for Military (QSM) compared to Home Buyer Tax Credits (FTHB & CHO) for civilians:
| FEATURES |
MILITARY / QUALIFIED SERVICE MEMBER (QSM) |
First Time Home Buyer(FTHB) |
Current Homeowner (CHO) |
|
Effective Dates (Closings) |
NOV 7, 2009 - JUNE 30, 2011* * If binding contract in place on or before April 30, 2011 |
Nov 7, 2009 - June 30, 2010* * If binding contract in place on or before April 30, 2010 |
Nov 7, 2009 - June 30, 2010* * If binding contract in place on or before April 30, 2010 |
|
Deadlines |
APRIL 30, 2011 (Contract) JUNE 30, 2011 (Closing) |
April 30, 2010 (Contract) June 30, 2010 (Closing) |
April 30, 2010 (Contract) June 30, 2010 (Closing) |
|
Maximum Credit 10% of purchase price, up to a maximum of: |
$8,000 (FTHB) $6,500 (CHO) |
$8,000 ($4,000 married filing separate) |
$6,500 ($3,250 married filing separate) |
|
General Eligibility |
Must qualify under FTHB or CHO eligibility PLUS be a "QUALIFIED SERVICE MEMBER" |
NO interest in a principal residence for 3 years prior to purchase |
Home sold or being sold must have been used as a principal residence consecutively for 5 of the previous 8 years |
|
Qualified Service Member Requirement |
Must be members of U.S military, Foreign Service or Intelligence Community |
None |
None |
|
Income Limits (AGI) |
$125,000 - Single $225,000 - Married Addt'l $20K Phase Out |
Same |
Same |
|
Eligible Property Types |
Single family residence that will be used as a primary residence. (Includes condos, co-ops, and townhomes) |
Same |
Same |
|
Regular Recapture Repayment of Tax Credit |
None |
None |
None |
|
Accelerated Recapture 3-Year Occupancy Rule: Full repayment of credit if home is sold within three (3) years of purchase |
NONE Exempt if sold due to "OFFICIAL EXTENDED DUTY" |
Full Recapture (entire amount of credit) paid on sale |
Full Recapture (entire amount of credit) paid on sale |
|
Official Extended Duty Requirement |
Any 90-day (or more) period of extended duty outside of the U.S., Jan 1, 2009 through Apr 30, 2010 |
None |
None |
|
Bond Financing |
Tax Credit is Allowed in conjunction with state or local bond financing |
Same |
Same |
|
Max Purchase Price |
$800,000 |
Same |
Same |
|
Purchase (Dependent) |
Ineligible |
Same |
Same |
|
Addt'l Requirements |
Must attach documentation of purchase to tax return |
Same |
Same |
MORE INFORMATION
For more information on the Home Buyer Tax Credit for Military and Other Service Members, please check out these links.
Home Buyer Credit for Military and Other Service Members (NAHB)
Home Buyer Credit for Military and Other Service Members (NAR)
Home Buyer Credit for Military and Other Service Members (IRS)
RELATED POSTS
- Home Buyer Tax Credit 2010 - Revised November 2009 (Extended and Expanded)
- Home Buyer Tax Credit 8000 - First Time Home Buyer (Extended), Expires April 30, 2010
- Home Buyer Tax Credit 6500 - Current Homeowners (Repeat Buyers), Expires April 30, 2010
- Home Buyer Tax Credit 8000 - First Time Home Buyer, Expires November 30, 2009
If you have any real estate questions, please contact me. Whether buying, selling, or just curious to learn more, I'm here to assist you. Please contact me with your questions. I look forward to hearing from you.
This post is provided for informational purposes only. If you have specific questions or individual concerns regarding the tax credit, please contact a tax professional or the Internal Revenue Service at 800-829-1040.
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Nice, clean, concise comparison Thanks for the info and heads up.
Great summary of the features of each approach. I hope it helps some of the buyers get off the fence and take action.