When it comes to tax credits for new homes, there are specific income limits and requirements depending on the type of credit or program. Here’s an overview of relevant programs:
- First-Time Home Buyer Tax Credit: This credit is not currently in effect but has been proposed. If it were to be passed, it would have income limits. Homebuyers must earn within 150% of the area’s median income to be eligible for the full credit. For those earning above this threshold, the credit phases out by $750 for every $1,000 over the limit.
- Low-Income Housing Tax Credit (LIHTC): This program doesn’t apply to individual homeowners but rather to developers of rental properties. It requires that at least 20% of units are occupied by tenants with an income of 50% or less of the area median income (AMI), or at least 40% of units are occupied by tenants with an income of 60% or less of AMI.
- Energy Efficiency Home Improvement Credit: This credit does not have specific income limits but applies to homeowners who make energy-efficient improvements to their homes. It allows for a tax credit of up to $3,200 for improvements made after January 1, 2023.
In summary, direct tax credits for purchasing new homes typically have income limits related to area median income, while improvements and energy-efficient credits may not have such restrictions.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/are-there-any-income-limits-for-claiming-the-tax-credit-on-new-homes/
