More Information On New Tax Credit

So far we have answered questions on eligibility, the amount of the credit and income limits as applied to the credit. Let's move on!

How is a partial credit determined?

There is a $20,000 difference between those who are eligible for a full tax credit & those where the credit is reduced to zero.  If you take the amount that you are over the limit by & divide it by 20,000, this will give you the percentage that you are over the limit by. ($75000 for single taxpayers & $150,000 for married filing jointly are the income limits). Subtract that number from 100% & multiply that by $8,000.  That will give you your tax credit amount.

Let's look at an example: A married couple has a modified adjusted gross income of $165,000. Their income exceeds $150,000 by $15,000. Dividing $15,00 by $20,000 yields 0.75. This means that they are over the limit by 75% and are, therefore, eligible for a tax credit of 25%. Multiplying $8,000 by 0.25 shows that the buyer is eligible for a partial tax credit of $2,000.

Remember, this is only an example. You should always consult your tax adviser. But, if you have any questions about the guidelines for the tax credit, give me a call & I'll email you a full report on the credit!

Call me at 704-363-6946 or email me at homes@thenaylorteam.com .