$8k tax credit question

[kingnat]

I've been trying to find out some corroborating info on this, but been highly frustrated with the interwebs this afternoon. For those unaware, there is currently an offer of an $8,000 tax credit for first time home buyers (as part of the stimulus i think)... and I'm trying to determine if this is some type of a deduction or if this is essentially an $8,000 check that we will receive within the year.

I am the sole wage-earner in our family and don't make much so we don't pay much in federal taxes anyway and within the last year we got all of that money back (thinly-veiled brag w/e)... I just need the straight scoop from those who know. <3 u ftr!

[ensign_lee]

It's an $8k tax CREDIT, which means that even if you owe less than $8k, you will still end up getting $8k.

For instance, you owe $6.7k in taxes, then apply the $8k deduction. You will get $1.3k as a refund.

[lockpull]

Found this when I as looking into it from http://www.federalhousingtaxcredit.com/2009/faq.php#9


I read that the tax credit is "refundable." What does that mean?
The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

[kingnat]

It's an $8k tax CREDIT, which means that even if you owe less than $8k, you will still end up getting $8k.

For instance, you owe $6.7k in taxes, then apply the $8k deduction. You will get $1.3k as a refund.

<3 u sir... exactly the straightforward answer I knew I could find here.