FTB Offers Guidance on Home Buyer Tax Credits
Business Wire, May 10, 2010
SACRAMENTO, Calif. — The Franchise Tax Board (FTB) today offered guidance on applications for
the New Home/First-Time Buyer state tax credit, cautioning taxpayers to
work closely with their escrow companies, to carefully follow the
instructions on the credit forms, and to send in their applications
timely to avoid being denied the credit.
This tax credit will operate on a first-come, first-served basis, said
State Controller and FTB Chair John Chiang. California families and
individuals who are interested in purchasing a home should take
advantage of this opportunity.
The new law, AB 183 (Caballero/Ashburn), provides $200 million ($100
million for new homes and $100 million for first-time buyers) of tax
credits available to those who purchase a qualified principal residence
between May 1 and December 31, 2010.
The purchase date is the date escrow closes. The credit can total
$10,000 by reducing ones state taxes by up to $3,333 per year for the
next three years. Taxpayers may apply for the tax credit if they have
entered into a sales contract before May 1, as long as escrow closes on
or after May 1, 2010.
These credits are also available for taxpayers who purchase (close
escrow) on a new or never-before-occupied home after December 31,
2010, and before August 1, 2011, as long as they entered into an
enforceable contract executed before January 1, 2011.
Credit reservations are available for taxpayers purchasing a new
home that may not be ready to close escrow in the near future. Those
with reservations must still apply for the credit by faxing the required
application and documentation within two weeks of the close of escrow.
Taxpayers cannot reserve a credit for contracts entered into before May
1, 2010. Reservations are not available for first time buyers purchasing
an existing home.
Important items to keep in mind when applying for the credit:
-
Applications must be faxed after escrow closes.
Applications will not be honored if the 2009 form is used, or if FTB
receives the application before escrow closes. -
Applications and a copy of the properly executed settlement statement must
be faxed within two weeks (14 calendar days) after the close of
escrow, regardless of whether a reservation request was submitted.
FTB will accept applications by fax only at 916.855.5577
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