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It seems that many people are still confused about one of the key issues involving how much you will be refunded on the Tax Credit. Most are under the assumption that it is a straight $8000.00 for everyone if you purchase a home, However it is 10% of what the purchase price of a home is up to a MAX of $8,000.00.
Example: If your home was $400,000 you would receive $4,000
just a heads up since I see so many using the full $8,000 in their examples.
Thanks for trying to give a heads up, but $8000 is 10% of $80,000. So any first time buyer who purchases a home over $80,000 and meets the income requirement would receive the the full $8000 credit. For the full credit, a single person could not make more than $75,000. For partial credit a single person can make between $75,000 and $95,000. For married couples, for the full credit the couple cannot make more than $150,000 combined. For partial credit, it phases out between $150,000 and $175,000.
For example:
If a married couple had income of $165,000, their credit would be reduced by 75% as shown:
Couple’s income $165,000
Income limit 150,000
Excess income $15,000
The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute).
In this example, the disallowed portion of the credit is 75% of $8000, or $6000 ($15,000/$20,000 = 75% x $8000 = $6000) Stated another way, only 25% of the credit amount would be allowed. In this example, the allowable credit would be $2000 (25% x $8000 = $2000)
So a couple making $165,000 a year would still be able to claim $2000 of the tax credit.
i know...i know... can I blame the the 4 week old and lack of sleep?
You sure being from Long Island doesn't have anything to do with it?
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math?
i know...i know... can I blame the the 4 week old and lack of sleep?
