Housing Tax Credit Info

Unwrapped, Housing Tax ‘Credit’ Is Really a Loan
From WashingtonPost.com
By Michelle Singletary
Thursday, July 31, 2008

There’s been a lot of discussion about how much the new housing bill passed by Congress will help individuals facing foreclosure. Some will be able to keep their homes, to be sure. But there’s a different provision of the Housing and Economic Recovery Act that I want to focus on — the much-trumpeted tax credit for first-time homebuyers.

A tax credit is much more valuable than a deduction. A credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable. Under the new law, certain homeowners will be eligible for a tax credit equal to 10 percent of the purchase price of a home, up to a maximum of $7,500. The credit is $3,750 for married couples filing separately. Unmarried people who jointly purchase a home will be able to divide the $7,500 credit. Read more on housing tax credit from the Washington Post…

• Thanks for the article, Chris!