1st time home buyer tax credit extended

HOLYOKE, Mass. (WWLP) - If you're in the market for a new house, you no longer have to rush to benefit from the first time home buyer tax credit.

A new law signed into effect earlier this month buys you another 7 months. "You have to close by the end of June, June 30th. But you have to have a purchasing contract active by April 30th," said H&R Block Marketing Coordinator Jose Cruz.

Taxpayers have the option of claiming the credit on either their 2009 or 2010 return. The maximum amount is still $8,000 for first-time home buyers.

But the new law also gives eligible existing homeowners a credit of up to $6,500. According to the Internal Revenue Service, 1.4 million families have taken advantage of this credit so far.

In fact, this federal incentive is credited with boosting home sales in our area.

"For the month of October, we saw sales in the Pioneer Valley increase by 18-percent," said Broker Kevin Sears of Sears Real Estate.

By the way, if you plan on claiming the first time home buyer tax credit, the IRS says you must file a paper return.

The new law also raises income limits for eligible home buyers. You can find that information on the IRS website:
http://www.irs.gov/newsroom/article/0,,id=204671,00.html