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In April of this year, California began to implement its own version of the homebuyer tax credit. This new law provides a $10,000 tax credit for buyers of new primary homes or first time homebuyers of resale properties.....
The amount of the credit is spread out equally over three years. However, don't be deceived into thinking you will automatically get the $10,000 credit. You better read the fine print if you plan to receive your money.
“Most buyers of California homes will NEVER see even one dollar of the $10,000 tax credit”
There are a few key features that will eliminate many homebuyers from receiving this credit…read below to learn the shocking truth on why you may not qualify…
THE CREDIT CANNOT EXCEED TAXES OWED
Therefore, if your income level only yields a $2,000 income tax liability to the state of California in any given year...you have no way of receiving the whole $3,333 credit. You would be limited to a $2,000 credit.
THE CREDIT IS NON-REFUNDABLE
This means that if you do NOT adjust your CA tax withholdings on your paystubs…you may get NONE of the tax credit. Because the homebuyer tax credit is nonrefundable, that means the state will not send you a check for any refund due as a result of the credit. The state will only reduce the liability you owe at tax time.
THE CREDIT MAY NOT BE CARRIED OVER
Only $3,333 can be credited in each of 3 tax years. If you don’t qualify for the $3,333 in year one, that money is lost. It can’t be carried over to the following tax year.
Hundreds, if not thousands of California homebuyers are going to be rudely awakened when they do NOT receive any of the tax credit.
Feel free to contact me for help clarifying this new credit…I’m here to help!!