The 2008 Federal Tax Credit included in the recently enacted Housing and Economic Recovery Act of 2008 for First-Time Homebuyers below as written on the IRS website:
Available for a limited time only, the credit:
Applies to home purchases after April 8, 2008, and before July 1, 2009.
Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.
However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.
Eligible taxpayers will claim the credit on new IRS Form 5405. This form, along with further instructions on claiming the first-time homebuyer credit, will be included in 2008 tax forms and instructions and be available later this year on IRS.gov, the IRS Web site.
If you bought a home recently, or are considering buying one, the following questions and answers may help you determine whether you qualify for the credit.
Source: IRS Website. Please visit http://www.irs.gov/newsroom/article/0,,id=186831,00.html for a full description and explanation of the 2008 Federal Tax Credit according to the IRS.
The 2009 Federal Tax Credit included in the recently enacted Housing and Economic Recovery Act of 2008 for First-Time Homebuyers below according to the Nationa Assoc of Home Builders (NAHB) website:
- The tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
- The tax credit does not have to be repaid.
- The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
- The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
Please visit the NAHB website at http://www.federalhousingtaxcredit.com/2009/home.html for more information.
As you can see, the biggest difference between the two is that the 2008 Tax Credit has to be repaid while the 2009 Tax Credit is a true credit and does not have to be repaid.