Existing 1st Time Credit Extended &

 New Existing Home owner tax Credit

November 6, 2009 ------- Worker, Homeownership, and Business Assistance Act of 2009

The Act extends the first-time homebuyer tax credit to principal residences purchased before May 1, 2010.   (If you purchase a principal residence before July 1, 2010, you can still qualify for the credit provided that you enter into a written binding contract prior to May 1, 2010.)

The new legislation also makes a number of changes, effective for purchases made after November 6, 2009:

• Higher income limits - The credit is reduced if your modified adjusted gross income (MAGI) exceeds $125,000 ($225,000 if married filing a joint return) and is completely eliminated if your MAGI reaches $145,000 ($245,000 if married filing a joint return).

• Credit is not available if the purchase price of your principal residence exceeds $800,000.

• Existing Home owner tax Credit The new legislation allows some existing homeowners to qualify for the credit when they purchase a new principal residence. You (and your spouse, if you're married) must have maintained the same principal residence for at least 5 consecutive years in the 8-year period ending at the time you purchase a new principal residence. You could qualify for a credit of up to $6,500 ($3,250 if you're married and file separately).

If you purchase a qualifying principal residence in 2009, you can elect to treat the purchase as if it were made on December 31, 2008--allowing you to claim the credit on your 2008 federal income tax return. If you purchase a qualifying principal residence in 2010, you can elect to treat it as if the purchase occurred on December 31, 2009. Your tax return must be amended to receive the credit.

Also new is the requirement to include documentation proving the purchase of the new residence. This usually is the closing statement also know as RESPA or HUD-1 form.