One Year Extension of Home Buyer Tax Credit for Active Veterans
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.
Remember, to be considered a first-time homebuyer, your buyers or their spouse must not have owned a home within the past three months. However, included in the extension is the $6,500 credit for existing home-buyers. If this is the case, your buyer may be eligible if they have lived in the home for five out of the past eight years and they meet the rest of the requirements.
Here are the requirements that must be met to be eligible for the credit:
- Veteran must have served at least 90 days overseas between January 1, 2009 and April 30, 2010.
- Individual annual income cannot exceed $125,000, and if married and file jointly, annual income cannot be more than $225,000.
- The purchase price of the home cannot exceed $800,000.
- The purchase contract must be signed by April 30, 2011, and closed by June 30, 2011.
If your client is an active duty military member they can use the tax credit with a loan through the VA Loan Guaranty program.