Most people are aware of the fact that the first time home buyer tax credit has been extended through April of 2010, and has been expanded to include a $6,500 credit to existing homeowners who qualify. But did you know that qualifying members of the military, and their spouses, may qualify for an EXTRA YEAR to take advantage of the credit? This is one of the little-known provisions of the Worker, Home Ownership and Business Assistance Act of 2009, signed into law in November, which extended and expanded the tax credit. Under the new law, servicemen & women who serve on qualified official extended duty service outside the country for at least 90 days between 1/1/2009 and 4/30/2010 would qualify. They would have until 4/30/2011 to sign a binding contract, and must close the transaction no more than 90 days later. Only one spouse is required to be overseas to qualify.
Some of the other features of the new law which benefit members of the military:
- Most buyers would have to repay the credit if the house is sold or otherwise ceases to be their principal residence within three (3) years of the initial purchase. But when a home belongs to a qualifying member of the armed services, Foreign Service or intelligence community, this provision is waived, as long as the home is sold in connection with orders sending the taxpayer to a new duty station more than 50 miles away.
- Members of the military may also be eligible for financial assistance if forced to sell their home for less than what is owed on the mortgage, due to a mandatory, permanent duty transfer.
In addition, general information on the Act can be found here: http://www.irs.gov/newsroom/article/0,,id=204335,00.html
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