by Calculated Risk on 2/22/2009 12:05:00 AM

Michelle Singletary at the WaPo does an excellent job of explaining how the new Federal home buyer tax credit works: You Can Benefit, but Don't Get Caught by Details

There are now two breaks in the tax code for first-time homeowners. Which credit you can take depends on when you purchased your home.

If you're a first-time home buyer and you purchased your home on or after April 8, 2008, and by Dec. 31, 2008, you do not qualify for the $8,000 first-time homebuyer's credit recently signed into law.

But you can still take the $7,500 tax credit -- though you have to pay it back because it's not really a credit. It's a 15-year, interest-free loan from the IRS.

The $8,000 tax credit is available for qualifying home purchases from Jan. 1, 2009, until Dec. 1, 2009. Did you notice I wrote Dec. 1? That's how it's worded in the law.

Singletary has more details.

The California home buyer tax credit is still a little unclear, but Jim Wasserman at the Sacramento Bee has some details: California home builders publicize new state tax credit

The $10,000 tax credit ... gives anyone who buys a new house between March 1, 2009, and March 1, 2010, up to $3,333 off their taxes for each of the first three years after buying.

... the California version offers breaks for both first-time and move-up buyers. It also sets no limits on income, meaning even the most expensive homes qualify.
...
The state Franchise Tax Board will set rules to implement the tax credit program, including whether it applies to a sales contract signed after March 1 or an escrow that closes after the date.

"We're still waiting for the (bill) language. Once we get that we'll have an ability to do an analysis for taxpayers," said Franchise Tax Board spokeswoman Brenda Voet on Friday.

Note that the California credit isn't limited to first time buyers and can be used by anyone buying a new home. Apparently the maximum total credit is $100 million (not mentioned in the article) or about 10 thousand new homes at the full credit.