SACRAMENTO - The state Franchise Tax Board is reminding residents to take advantage of the New Home Tax Credit, which can reduce annual state taxes by up to $3,333 per year for the next three years.The tax credit is available for taxpayers who close escrow on a new home after May 1 and before Aug. 1, 2011, as long as they enter into an enforceable contract executed before Jan. 1, 2011. The seller must certify that the home has never been previously occupied. Taxpayers can request a reservation if they are purchasing a new home that is not ready to close escrow in the near future. A reservation does not guarantee the credit, but only holds the taxpayer's place in line until escrow closes. The tax credit is limited to the lesser of five percent of the purchase price or $10,000. There are no income limits but the tax credit cannot reduce regular tax to below the tentative minimum tax. To apply, homebuyers should complete FTB Form 3549-A and fax it, along with the final settlement statement, to the Franchise Tax Board at (916) 855-5577. The application must be sent within two weeks after the close of escrow. The FTB stopped accepting applications for the First Time Buyer Credit on Aug. 15. For more information on the New Home Tax Credit, go to www.ftb.ca.gov.
********** Published: September 23, 2010 - Volume 9 - Issue 23