Wisconsin First Time Home Buyer | $8000 Tax Credit Basic Information | Federal Housing Credit Frequently Asked Questions |

Couple staring at the new house they purchased

Tax Credit - The Basics

This is your chance of a lifetime, don’t miss it! There has never been a better time to buy a house with a huge selection of homes for sale in Wisconsin, record low interest rates, and now up to an $8,000 tax credit for first-time home buyers.

Here is how the credit works:

If you’re in a market for your first home, or if you are looking to buy again after not owning for three years, Congress is giving you an added incentive to become a homeowner. If you qualify and purchase a home after January 1, 2009 and before December 1, 2009, you could receive up to the full $8,000 tax credit that you won’t have to repay. Any home purchased for $80,000 or more qualifies for the full $8,000 amount. If the house costs less than $80,000, the credit will be 10% of the cost.

There are some restrictions, so please read the below and the questions and answers to make sure you qualify.

Payback Provisions

The tax credit is a true credit. It does not have to be repaid.
The only repayment requirement is the homeowner sells the home within three years after the purchase.

Income Limits

Home buyers who file as single or head-of-household taxpayers can claim the full $8,000 credit if their modified adjusted gross income (MAGI) is less than $75,000.
For married couples filing a joint return, the income limit doubles to $150,000.
Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit.
Married couples who earn between $150,000 and $170,000 are eligible to receive a partial first-time home buyer tax credit.
The credit is not available for a single taxpayer who’s MAGI is greater than $95,000 and married couples with a MAGI that exceeds $170,000.

Effective Dates for the Tax Credit

To qualify, you must actually close on the sale of the home on or after January 1, 2009 and before December 1, 2009.

Tax Credit is Refundable

A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference.
For example, if you owe $5,000 in federal income taxes, you would pay nothing to the IRS and receive a $3,000 payment from the government.
If you are due to receive a $1,000 tax refund from the government, your refund would grow to $9,000 ($1,000 plus $8,000 from the home buyer tax credit).
Buyers can take the tax credit on their 2008 or 2009 income tax return.

Types of Homes that Qualify for the Tax Credit

All homes, whether single-family, townhomes or condominium apartments, will qualify, provided that the home will be used as a principal residence and the buyer has not owned a principal residence in the prior three years. This also includes newly-constructed homes.

For more information, please read the questions and answers.