Obama Signs $787 Billion Stimulus Plan into Law

Homebuyer Credit

The plan will increase the first time home buyer credit from $7,500 to $8,000. This credit is available for qualifying home purchases this year between January 1, 2009 and December 1, 2009. The tax credit phases out for individual tax payers that make over $75,000 and couples (filing jointly) that make over $150,000. If home buyers sell the home within three years, they'll forfeit the credit (or have to pay it back if they've already claimed it). The stimulus eliminates the repayment requirement as well.

FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
February 2009

FEATURE
CREDIT AS CREATED JULY 2008
APPLIES TO ALL QUALIFIED
PURCHASES ON OR
AFTER APRIL 9, 2008
REVISED CREDIT -
EFFECTIVE FOR PURCHASES ON
OR AFTER JANUARY 1, 2009 AND
BEFORE DECEMBER 1, 2009
Amount of Credit
Less of 10 percent of cost of home or $7,500.
Maximum credit amount increased to $8,000.
Eligible Property
Any single family residence
(including condos, co-ops, townhouses)
that will be used as a principal residence.
No change.
All principal residences eligible..
Refundable
Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser..
No change. Purchasers will continue to receive refund for unused amount when tax return is filed..
Income Limit
Yes. Full amount of credit available for individuals with adjusted gross income of no more the $75,000 (150,000 on a joint return). Phases out above those caps ($95,000 and $170,000)
No change.
Same income limits continue to apply.
First-time Homebuyer Only
Yes. Purchaser (and purchaser's spouses) may not have owned a principal residence in 3 years previous to purchase.
No change. Still available for first-time purchasers only.
Three-year rule continues to apply.
Revenue Bond Financing
No credit allowed if home financed with state/local bond funding.
Purchasers who utilize revenue bond financing can use credit.
Repayment
Yes. Portion (6.67% of credit or $500) to be repaid each year for 15 years, starting with 2010 tax filing.
No repayment for purchases on or after January 1, 2009 and before December 1, 2009
Recapture
If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.
If home is sold within three years of purchase, entire amount of credit is recaptured on sale. Applies only to homes purchased in 2009.
Termination
July 1, 2009
(But note program changes for 2009).
December 1, 2009
Effective Date
Purchases on or after April 9, 2008 and before January 1, 2009.
Repayment to begin for 2010 tax year.
All revisions are effective as
of January 1, 2009

Home Energy Credit

Buying a new energy-efficient furnace, energy-saving windows and doors, or adding insulation to homes could net tax credits. The new program allows consumers to recoup 30 percent of their investment, up to $1,500. The tax credit is applied when the 2009 or 2010 income tax return is filed. Congress also has set aside $5 billion to weatherize more than $1 million homes for "modest income" families, who are expected to save, on average, $350 per year on heating and air conditioning.

New Tax Cuts

The plan provides a $400 payroll tax break for workers earning up to $75,000; Couples (filing jointly) get $800 for income up to $150,000.

If you would like a list of more details of what is in the stimulus
bill, visit the link below:
http://online.wsj.com/public/resources/documents/STIMULUS_FINAL_0217.html

Information gathered from various sources: Wall Street Journal, CNBC & Fox News
Information deemed reliable, but is not guaranteed.

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Information deemed reliable, but not garanteed.