DC First-Time Homebuyer $5,000 Tax Credit

While many people have been watching the Congress with its bills to save the financial markets, many haven't noticed that the Senate bill includes an extension of the DC First Time Homebuyer $5,000 Tax Credit.

The Federal $5,000 DC Homebuyer's Tax Credit passed the Senate on Wednesday. The Senate language includes a 2 year extension (retroactively for 2008 and prospectively for 2009). Now, it goes to the House for approval. That vote is expected today.

In the past, the eligibility for the credit has been phased out for single filers making $70,000 to $90,000 (adjusted gross income) and joint filers making $110,000 to $130,000. For example, single filers making $70,000 (or joint filers making $110,000) would receive the entire credit; single filers making $80,000 (or joint filers making $120,000) would receive a $2,500 credit; single filers making $90,000 (or joint filers making $130,000) would not receive the credit.

Those who have owned a principal residence before in the suburbs or in the District are still eligible as long as they have not owned a home in the District of Columbia during the year preceding the new purchase.

To claim the Tax Credit, ask for Form 8859 "DC Homebuyer" or download it from the IRS website at http://www.irs.gov

The exact details of the bill are not available at the time of this posting.