Saturday, February 6, 2010

New Home Buyer Credit for California State (publication 3528)

New Home Buyer Credit

Same way as Federal (Form 5805), California government do support New Home Buyer Credit in current tax year.

If you receive a Certificate of Allocation from the California Franchise Tax board, then you are eligible for claiming new home buyer credit.

This credit is a non-refundable credit. And will reduce your tax amount

If you can qualify for this credit, you can claim this credit on your Form 540 or Form 540NR. You can use code "219" for new home buyer credit in the given credit code to claim this credit. [As most of the Tax software company will put automatically if you qualify.]

Government Instructions are saying as below for Home Credit.

Home Credit – For taxable years beginning on or after March 1, 2009, and before March 1, 2010, a home credit against net tax will be allowed for the purchase of a never been occupied home in an amount equal to
the lesser of five percent of the purchase price of a qualified principal residence or ten thousand dollars ($10,000).

So, The lesser of 5% of the purchase price of a qualified principal residence or $10,000. The credit is taken equally over three years.

[For more information see California FTB publication 3528]

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