$8000 housing tax credit- good news bad, bad news & caution

update: Read my latest post on $8000 first time home buyer tax credit-details explained for latest updates on 8000 housing tax credit.

Just yesterday, the US house of representatives passed the economic stimulus package which in particular contained plans for housing stimulus. The exact housing stimulus plan is to offer $8000 housing tax credit, (also referred to as $8000 first time home buyers tax credit) to first time home buyers in order to boost the housing market. It is very likely that you have arrived on this webpage in search of some 'extra' information on housing tax credit- let me quickly mention some good news bad news and some words of caution related to this tax credit.

$8000 housing tax credit - bad news

The earlier version of economic stimulus package contained plans to offer $15000 housing tax credit to first time home buyers. This planned tax credit was refundable i.e. if the total tax you owed to IRS was less than $15000, and assuming you are a first time home buyer eligible for this tax credit - you could get the balance amount as refund from IRS. This is what refundable tax credit means. There were other great features of this $15000 housing tax credit- it had no income limits and you were not required to repay it to the IRS like the curren $7500 housing tax credit. The bad news is that the economic stimulus package had to be modified in order to get majority, and the housing tax credit had to be reduced from $15000 to $8000.

$8000 housing tax credit - good news.

On the brighter side of it, this $8000 tax credit is still $500 more than the current $7500 tax credit. Moreover you do not have to repay this tax credit to the IRS. Its all yours.

$8000 housing tax credit - words of caution

The caution part is that the exact details of this $8000 tax credit are not out yet. I will be posting details on this blog as soon as they are available in this coming week. While there are several blog posts claiming some confirmed news, there is no precise information about whether this tax credit is refundable, or about its income limits etc.