Didn’t Close on Your Home Loan by the Deadline? There’s an Extension

If you didn’t close on time to qualify for the $8,000 or $6,500 homebuyers’ credits, you can breathe a sigh of relief. On July 2, the President signed the Homebuyer Assistance Improvement Act of 2010 into law. This Act provides relief to taxpayers who were unable to close on their new homes by the June 30, 2010 deadline. As of last week, you must now close before October 1, 2010.

In many cases, homebuyers were unable to close by the deadline due to backlogs with lenders and federal programs involved in homebuyer loans. Those who signed a contract no later than the April 30,2010 deadline now have until the end of September to complete their closings and still get the credits.

Under the previous law, the first-time homebuyer credit of $8,000 and the $6,500 credit for long-term residents expired for homes purchased after July 1, 2010. If a written binding contract to purchase a principal residence was entered into before May 1, 2010, the law now allows the credit to be claimed if the purchase is settled by September 30, 2010.

2010 homebuyers have the option to claim the credit on either their 2009 or 2010 income tax returns. If your 2009 return has already been filed, it may be amended to include the credit. For more information, contact your tax professional or visit www.amdcpa.com.