$5,000 D.C. Homebuyer Tax Credit

DC First-Time Homebuyer Federal Tax Credit

For homes purchased on or before December 31, 2011.

This federal tax credit is available to first-time homebuyers in the District of Columbia. The credit is the smaller of:

• $5,000, if single, married filing jointly, head-of-household, or qualifying widow(er) ($2,500, if married filing separately) or
• The purchase price of the home.

In general, you may claim the credit if:

• You purchased a main house during the tax year in the District of Columbia, and
• You (and your spouse, if married) did not own any other main home in the District of Columbia during the 1-year period ending on the date of purchase.

Q & A on the $5,000 D.C. Homebuyer Tax Credit

1. Does it matter how much money I make?
   Eligibility for the credit is 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.
2. What if I have already owned a home in the suburbs or in the District?
   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.
3. When do I get the $5,000?
   First-time homebuyers will claim the $5,000 against federal income taxes they will file by April 15. If those taxes are less than $5,000, the remainder of the credit can be carried over and applied against the next year’s taxes.
4. Must the home bought with the credit be my primary residence?
   Yes. This home must not be an investment property.
5. How do I get the proper IRS form I need to file for the tax credit?
   Call the IRS at 1-800-TAX -FORM to get your copy of the tax form for the $5,000

Source  DC Office of Tax and Revenue  and  Congresswoman Norton’s Website