Taxing Question: How Fast Can You Spend $4.54 Billion?

(MoneyWatch) 

Happy Tax Day. If you haven't already filed, have I got a form for you: Form 4868, a request to file an extension.

Meanwhile the tax stats are starting to pour in. The most interesting one to date: Some 568,000 taxpayers have filed for the $8,000 first-time home buyer refundable tax credit. That works out to a fast $4.54 billion, courtesy of the Treasury Department.

I've been hearing from Realtors and home builders across the country who are trying to use the $8,000 lever to jack up some additional interest from first-time buyers -- who are expected to account for just over half of all home buyers this year.

As long-time housing industry observers know, if you can get first-time buyers to make an offer on a house, their sellers can then trade up to their next home, and so on. It's like trickle-down economics in reverse.

To get folks focused on the ins and outs of the $8,000 tax credit, with the implication that this kind of change would buy a nice, new house, the National Association of Home Builders has put up a new website to help folks make some sense of yet another change in the tax code.

Here's what you need to know to take advantage of the first-time home buyer tax credit:

• You don't necessarily have to be a first-time buyer. If you haven't owned a home in the past 3 years, you qualify.
• It's a refundable tax credit. That means you get 10 percent of the purchase price up to $8,000, regardless of whether you pay that much in taxes this year.
• You have to close on your home between January 1, 2009 and December 1, 2009. (I don't know why you can't buy a house through the actual end of 2009, but it probably had to do with calculating the cost, and hey, that's Washington!) This is actually a problem for people who want to buy new homes if the developer won't be ready to close by the December 1 deadline. You cannot close on your loan without the house being ready to live in, and if the house isn't ready on time, you'll lose out on the tax credit.
• You never have to pay the tax credit back. Unfortunately, if you qualified for the $7,500 tax credit by purchasing your home last year, you do have to pay that one back. (Sorry!)
• Single taxpayers with incomes up to $75,000 and married taxpayers with incomes up to $150,000 qualify for the full tax credit. The tax credit phases out a little over those levels.
• You can file for the tax credit with your 2008 or your 2009 return. If you buy a house in June, you can refile your 2008 taxes to get your cash this year.

The NAHB's website also lists some excellent resources for first-time homebuyers, as well as other tax provisions contained in the American Recovery and Reinvestment Act of 2009.