| HOMEBUYER TAX CREDIT | FEDERAL | CALIFORNIA |
|---|
| Amount of Tax Credit | 10% of purchase price not to exceed $8,000 | 5% of purchase price, not to exceed $10,000.
Maximum tax credit for all taxpayers is $100
million to be allocated on a first-come,
first-served basis. |
| Principal Residence | Yes. Property purchased must be the taxpayer’s principal residence which is generally the home the taxpayer lives in most of the time (26 U.S.C. § 121). | Yes. Property purchased must be a qualified
principal residence and eligible for the
homeowner’s exemption from property taxes
(Cal. Tax & Rev. Code § 218). |
| Type of Property | House, condominium, townhome, manufactured home, apartment cooperative, houseboat, houstrailer, or other type of property located in the U.S. | Single-family residence, whether detached or
attached, condominium, cooperative project
unit, houseboat, manufactured home, or
mobilehome. |
| First-time Homebuyer | Yes. The buyer (and buyer’s spouse if any) must not have owned a principal residence during the three-year period before date of purchase. | No. The buyer need not be a first-time
homebuyer. |
| Unoccupied Property | No. Property may have been previously occupied or not. | Yes. Property must have never been
previously occupied as certified by the seller. |
Minimum Occupancy
Requirement | Must be the buyer’s principal residence for 36 months after purchase, otherwise credit must be repaid. | Must be the buyer’s principal residence for 2
years after purchase, otherwise credit must
be repaid. |
| Income Restriction | Yes. Tax credit begins to phase out if modified adjusted gross income is over $75,000 (or $150,000 for joint filers). No tax credit at all if modified adjusted gross income is over $95,000 (or $170,000 for joint filers). | No. |
| Date of Purchase | January 1, 2009 to November 30, 2009, inclusive.
(Note: A repayable $7,500 tax credit is available for purchases from April 9, 2008 to December 31, 2008.) | March 1, 2009 to February 28, 2010, unless $100 million funding runs out. |
| Refundable | Yes. Any amount of the tax credit not used to reduce the tax owed may be added to the taxpayer’s tax refund check. | No. |
| Repayment | The buyer need not repay the tax credit if the buyer owns and occupies the property for at least 36 months after the purchase. | The buyer need not repay the tax credit if the
buyer owns and occupies the property for at
least two years immediately following the
purchase. |
Multiple Buyers
(not married to each other) | The $8,000 tax credit may be allocated between eligible taxpayers in any reasonable manner. | The $10,000 tax credit may be allocated between
eligible taxpayers based on their percentage of
ownership. |
Maximum Credit for All
Taxpayers | N/A | $100 million. |
| When to Claim | Full tax credit may be claimed on 2008 or 2009 tax returns. | 1/3 of total tax credit may be claimed each year
for 3 successive years (e.g. $3,333 for 2009,
$3,333 for 2010, and $3,333 for 2011). |
| Tax Agency | Internal Revenue Service (IRS). | Franchise Tax Board (FTB). |
| How to File | First-Time Homebuyer Credit (IRS Form 5405) to be filed with 2008 or 2009 tax returns | Specific procedure for claiming credit includes
completing an Application for New Home
Credit (FTB Form 3528-A). |
| When to File Form | Form 5405 must be filed with 2008 or 2009 tax returns. | FTB Form 3528-A must be faxed by escrow
to the FTB within one week after close of
escrow and filed with the buyer’s 2009 or
2010 tax returns. |
| Exceptions | Acquisitions by gift or inheritance, acquisitions from related persons as defined, and buyers who are nonresident aliens. | Credit allowed is not a business credit under Cal.
Tax & Rev. Code § 17039.2. |
| Legal Authority | 26 U.S.C. section 36. | Cal. Rev. & Tax Code section 17059 (as
amended by Senate Bill 15). |
| Date of Enactment | February 17, 2009. | February 20, 2009. |
| More Information | IRS website at
http://www.irs.gov/newsroom/article/0,,id=204671,00.html. | FTB website at
http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml
which includes a tally of the $100 million original
funding that is still available. |