More Time to Qualify for the Home Buyer Credit
Congress has extended the deadline for closing the deal on home purchases made by April 30.
To qualify for the new home buyer tax credit -- worth up to $8,000 for first-time buyers and up to $6,500 for long-time residents of their previous homes -- buyers had to sign a binding contract by April 30. Before this last minute change in the law, they also had to close on the deal by midnight June 30 (see FAQs on the Home Buyer Tax Credits).
The problem was, according to the National Association of Realtors, as many as 180,000 buyers who met the April 30 deadline for buying are still waiting to close. This is a particular problem for folks buying foreclosed properties; the complexities of such deals simply take more time. NAR president Vicki Golder, of Tucson, Ariz., says these buyers are “at the mercy of a work-flow jam with lenders” that could cost them the credit. (For estimates of how many buyers are in jeopardy of forfeiting the credit, see below.)
The new law extends the closing date deadline to September 30. This will not open the door to new purchasers. The April 30 date for signed contracts remains the same. The change simply gives buyers more time to get the deal done and pocket the $6,500 or $8,000 credit. (Buyers who meet the new deadline can claim the credit on an amended 2009 tax return to get their cash faster than waiting to claim the break on the 2010 return filed next spring. See A Second Chance at Tax Savings to learn more.)
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
State by state estimates of at-risk home buyers.
The National Association of Realtors has come up with these estimates of the number of home buyers in each state who were in jeopardy of missing out on the new home buyer credit through no fault of their own. They bought on time but lenders and appraisers simply couldn’t get the deal closed by June 30.
Alabama, 2,590; Alaska, 830; Arizona, 5,440; Arkansas, 2,090; California, 17,700; Colorado, 3,390; Connecticut, 1,770; Delaware, 400; District of Columbia, 300; Florida, 14,830; Georgia, 6,270; Hawaii, 710; Idaho, 1,270; Illinois, 7,030; Indiana, 3,560; Iowa, 2, 030; Kansas, 1,840; Kentucky, 2,540; Louisiana,1,800; Maine, 840; Maryland, 2,630; Massachusetts, 3,930; Michigan, 6,470; Minnesota, 3,760; Mississippi, 1,530; Missouri, 3,600; Montana, 760; Nebraska, 1,110; Nevada, 3,800; New Hampshire, 690; New Jersey, 4,300; New Mexico, 1,160; New York, 9,190; North Carolina, 4,890; North Dakota, 460; Ohio, 8,510; Oklahoma, 2,760; Oregon, 2,090; Pennsylvania, 5,830; Rhode Island, 500; South Carolina, 2,460; South Dakota, 500; Tennessee, 3,910; Texas, 15,340; Utah, 1,130; Vermont, 400; Virginia, 3,890; Washington, 3,190; West Virginia, 940; Wisconsin, 2,690; and Wyoming, 390.
-
I'm 73 and hate winter, but I can't afford to be a snowbird.How can a snowbird wannabe warm up without the expense? We asked professional wealth planners for advice.
-
5 Smart Things to Do With Your Year-End BonusAfter you indulge your urge to splurge on a treat, consider doing adult things with the extra cash, like paying down debt, but also setting up a "fun fund."
-
Gen X Investors: Protect Your Portfolio From an AI BubbleAmid talk of an AI bubble, what's the best course of action for investors in their 50s and 60s, whose retirement savings are at risk from major market declines?
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
Tax Refund Alert: House GOP Predicts 'Average' $1,000 Payouts in 2026Tax Refunds Here's how the IRS tax refund outlook for 2026 is changing and what steps you can take now to prepare.
-
New IRS Changes to FSA Contribution Limits for 2026: What to KnowHealth Care Flexible Spending Accounts have tax advantages worth looking into, especially in light of new IRS changes.
-
Is a New $25,000 Health Care Tax Deduction Coming in 2026?Tax Policy A proposal from GOP Sen. Josh Hawley adds to the chatter about health care affordability.
-
Are You Middle-Class? Here's the Most Tax-Friendly State for Your FamilyTax Tips We found the state with no income tax, low property tax bills and exemptions on groceries and medicine.
-
Social Security Benefits Quiz : Do You Know the IRS Tax Rules?Quiz Social Security benefits often come with confusing IRS tax rules that can trip up financially savvy retirees and near-retirees.
-
How Are I Bonds Taxed? 8 Common Situations to KnowBonds Series I U.S. savings bonds are a popular investment, but the federal income tax consequences are anything but straightforward.
