Special Provisions for Military in Tax Credit Law

Armed services members, as well as intelligence service and foreign service personnel, who are on active duty and out of the U.S. for 90 days during any part of 2009, will have an additional year to buy their homes and still qualify for the tax credit. The deadline to be under contract for qualifying personnel is April 30, 20ll (versus April 30, 2010 for other purchasers).

For military and other covered personnel, another benefit is a waiver on the time of occupancy of the home purchased with the tax credit. Homebuyers who purchase their home using the tax credit must use that home as a principal residence for a period of no fewer than three years, or must forfeit the entire credit. Military, intelligence and foreign service members do not have to repay the credit if they have to sell their home after fewer than three years occupancy due to official business.

First-time homebuyers who are eligible can obtain a tax credit of $8,000. Current homeowners are eligible for a $6,500 tax credit, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years.

Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.