First-time home-buyers who buy between now and November could get either an $8K or 10%-of-home-value tax credit, whichever is lower. Remember: it's a dollar-for-dollar tax cut, not a liability reduction (which would only save you a paltry $1K).
So, let's math out the $8K part.
If you owe $8K in income taxes and qualify for the $8K tax credit, you owe nothing ($8K-$8K=0). I know what you're thinking, and the answer's yes... If you're liable for $3K in income tax, you'd instead get a check for $5K ($8K-$3K=$5K).
Home-buyer tax credit stipulations
The $8K incentive declines for couples who make more than $150K and single filers above $75K. It's capped at $170K and $95 respectively. Here's an example: Jose and Tina make $160K. The phase-out threshold is $150K. Tina and Jose are $10K over this amount. With us so far? Dividing that $10K by $20K equals 50%. To determine the amount of the partial first-time home-buyer incentive to this couple, multiply $8K by 50%. The result is $4K. Clear as bells? Contact us or leave a comment if you have any questions. Another example: Anya makes $88K. Her income exceeds $75K by $13K. Dividing $13K by $20K gives us 65%, which leaves 35% left over. Multiplying $8K by 35% means Anya's tax liability is down to about $6K.