The Federal Government had its citizens captivated with the anticipation of the Senate’s $15000 tax credit that chris2was quickly rejected in committee.  This credit generously provided homebuyers – not just first-time homebuyers – with a tax credit of up to $15000.  Instead, negotiations on the bill increased last year’s $7500 housing credit by $500 resulting in the approved $8000 tax credit, or 10% of the purchase price– whichever is less.  It also eliminated the requirement to payback the credit so long as you don’t sell your home for three years.

So what does this mean to you if you utilized the 2008 housing credit?  Under in the 2008 provisions, taxpayers will indeed by encumbered with its limitations including payback of the credit and realization that it was simply a 15 year no-interest loan, payable in 15 installments, beginning in 2010. Oh yes… and that it was a credit of $7500, $500 less than the 2009 version.

Under the umbrella of the 2009 version of this housing credit, only first-time homebuyers are eligible – eliminating a significant number of hopefuls from the original $15000 tax credit version.  “First-time” homebuyers, however, are defined as purchasers who have neither owned a home nor co-owned a home within the three years preceding their home purchase that must be made January 1 – December 31, 2009.  But remember… you must not have closed on a home in the three years preceding your closing on the 2009 property.  That said, your closing date of your 2009 purchase must be at least three years from any previous real estate closing in order to qualify for the $8000 tax credit.

And what about income and other eligibility limitations?  This version sets eligibility at $75,000 adjusted gross income for single taxpayers, and $150,000 for couples filing jointly. Additionally there is no exclusion against purchases under state or local tax-exempt mortgage revenue bond programs. As with the original $15,000 version, the purchase must be your primary residence and includes condominiums, single-family homes, co-ops, houseboats, and mobile homes, to name a few.

So how will this minor increase in housing tax credit help the waning economy? Congressional hopefuls site the possible “ripple down effects” of taxpayers spending on furnishings, appliances, brokerage commissions, moving costs, etc.  And as with the earlier incentive, they’re hoping it will be the jolt the economy needs to turn-around.

So how do you apply for the $8000 housing credit? It’s easy. Just claim it on your tax return – either your 2008 or 2009. No other forms or papers need to be filed. Taxpayers who submitted their returns can file amended returns for 2008 to claim the credit.

Although this final version is far less than anticipated from the original $15000 tax credit version, it’s worth a look.  If you qualify, and don’t pay $8000 in taxes, you get the rest as a check. For some…not bad at all.