First time homebuyers that serve in the military, or work as certain federal employees have some unique tax relief opportunities available to them.  The Worker, Homeownership and Business Assistance Act was signed into law on November 6, 2009, and extends and expands on the first-time homebuyer credit.  According to the IRS website, the new law has the following three primary ramifications:

• Extends deadlines for purchasing and closing on a home.
• Authorizes the credit for long-time homeowners buying a replacement principal residence.
• Raises the income limitations for homeowners claiming the credit.

There are some additional tax benefits that are extended to members of the military, and other certain federal employees (serving outside the United States).  One is that the above two groups have an additional year to purchase a principal residence, and qualify for the credit.  That translates into a June, 30, 2011 deadline an eligible taxpayer would have to have purchased, or entered into a binding contract to purchase a principal residence.  Members of the uniformed services, members of the Foreign Services and employees in the intelligence community are eligible for this rule.  It applies to any individual (and their spouse if any) who serves for at least 90 days of extended duty outside the United States, during the period beginning after Dec 31, 2008 and ending before May 1, 2010.

If a home gets sold, or ceases to be the taxpayer’s principal residence after Dec 31, 2008, the credit repayment (recapture) requirement may also be waived, for members of the uniformed services, Foreign Service or employees of the intelligence community.  This holds true even during the actual year of purchase.

For service to be qualified as “official extended duty” it must take place at least 50 miles away from the taxpayer’s principal residence, whether inside or outside the United States.  It would also qualify for service residing under government orders in government quarters.  The IRS describes extended duty as “any period of duty pursuant to a call.

Disclaimer:  The information contained in this article is in no way intended for use as legal tax advice.  No assumption should be made that a tax attorney, enrolled agent or former IRS employee was involved in the creation of any content herein.  Advice on personal or business tax matters can be obtained by contacting Advanced Tax Help at (800) 970-8704, or by logging on to www.advancedtaxhelp.com