Vets Gain Time on Tax Credit

Submitted by isabel on Tue, 02/02/2010 - 10:24am

U.S. military personnel and other federal workers who are serving out-side the country have an extra year to qualify for the $8,000 tax credit offered to first-time home buyers and the $6,500 credit available to repeat buyers.

To capture the credits, the law specifies that eligible taxpayers must sign a contract to buy a principal residence by April 30 and close escrow no later than June 30.
 
However, military personnel get an extra 12 months, which means they have until April 30, 2011, with closing to come within 90 days. Typically, the credit must be repaid if within three years of the purchase the home is no longer the buyer’s principal residence.
 
However, for members of the armed services, intelligence community or Foreign Service, that provision is waived if the house is sold in connection with orders sending the owner to a new duty station which is at least 50 miles away. There also are programs designed to help military personnel if they sold a home at a loss because of permanent duty transfer.
 
Home owners who were injured, wounded or became ill in the line of duty while deployed since Sept. 11, 2001, and are relocating for further medical treatment will get priority in the processing of applications. This includes the Coast Guard and civilian employees of the Department of Defense.
 
Spouses of military personnel killed in the line of duty also would get preferential treatment if they must relocate within two years of the death of their mates.
 
For further details of the programs, contact the Army Corps of Engineers, which is charged with administering the Homeowners Assistance program on behalf of all branches of the military.