First-Time Home Buyer Tax Credit Military Extension

Although the First-Time Home Buyer Tax Credit has expired for most Americans, an extension has been issued for qualified service members who are ordered on a period of official extended duty.

Congress has acknowledged the unique circumstances affecting members of the military, the foreign service and the intelligence community by making the following exceptions that apply to both the $8,000 tax credit for first-time home buyers and the $6,500 tax credit for repeat home buyers.
                                                                                - National Association of Homebuilders

If you are a member of:

  • A member of the uniformed services of the U.S military
  • A member of the Foreign Service of the U.S.
  • An employee of the intelligence community

And you were on extended duty outside of the United States for at least 90 days:

  • Beginning after December 31, 2008
  • And ending before May 1, 2010

You may qualify for Extended Deadlines

Additionally, there are exceptions to the basic Tax Credit rules that apply to qualified service members:

  • Qualified service members who sell or move from a tax credit home within three years of the initial purchase due to official extended duty are exempt from the recapture rule (which typically applies to homes that are sold or cease to be used as a principal residence within three years of the initial purchase).
  • Although the qualifying deadline was September 30, 2010, that deadline has been extended for qualified purchases with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.
  • If you were forced to return to the U.S. for medical reasons before completing an assignment of at least 90 days of qualified official extended duty outside of the United States, you may still qualify for the one-year extension.

Other General First-Time Home Buyer Tax Credit Information:

  • First-time home buyers purchasing any kind of home, new or resale, are eligible for the tax credit.
  • The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
  • The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000.
  • The home purchase must occur on or after January 1, 2009 and before December 1, 2009. For purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfered to the home owner.
  • The credit does not need to be repaid as long as the home buyer uses the residence as a principal residence for at least three years.
  • The buyer will claim the credit on their federal income tax return. The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.