An exciting new California tax credit was signed into law recently. Any buyer who on or after March 1, 2009, and before March 1, 2010, purchase a principal residence that has never been occupied may qualify for the credit. Here are some major facts about the credit:

• The buyer must reside in the new home for a minimum of two years immediately following the purchase date.

• California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less.

• Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.

• The State of California has allocated $100,000,000 for this tax credit.

• Credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available.

• Applications must be filed no later than 7 days after the close of escrow.

• If all guidelines are met, the credit does NOT have to be repaid.

• The CA credit can be combined with the Federal $8,000 tax credit.

Applications for the allocation of credit will be accepted by fax only (916.845.9754), starting March 1, 2009. I have attached a copy of that form here for convenience just click on this link  CA Homebuyer's Tax Credit.pdf

You may contact the Franchise Tax Board by phone or email for more information:

Phone:     888.792.4900 (press 5)

               916.845.4900 (not toll-free)

Email:      wscs.gen@ftb.ca.gov (Do not send confidential information via email)

If you would like more information about how this exciting tax credit can help you or your clients just use this contact form below.