Important CA Tax Credit information

[livinincali]

Based on my understanding of how the CA tax credit is worded is pretty likely you won’t get the full 10K unless your CA tax liability exceeds 3,333 per year.

Here is the link to the Official Tax Credit.
http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml

[quote]
These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.
[/quote]

For those trying to figure out whether to delay escrow or do something creative to get both tax credits it’s probably worth evaluating your CA tax liability to understand how much you actually will receive. If your tax liability is only 2K per year then you will only receive 6K instead of 10K. It also looks like they can cap the payouts based on how many people take the credit.

[treehugger]

I don’t see the problem? I am going to get the full amount.

I don’t make huge money, but I just looked at my paystub from a few weeks ago and it was already over $1000, if I multiply that out for the year it has my tax burden at close to $4000. If I understand this whole thing correctly, that means I get $3333 tax credit for the next 3 years.

This is different from the feds who are just going to give me an $8000 tax rebate (god bless those wonderful folks).

If I am misunderstanding someone please let me know??

I will be first in line May 3rd when I close (nothing is going to go wrong)! I am doing the happy dance already….I love the government!

Reality is I would have bought anyway, so it is a bonus (or is it big enough to be a windfall?).

[treehugger]

I don’t see the problem? I am going to get the full amount.

I don’t make huge money, but I just looked at my paystub from a few weeks ago and it was already over $1000, if I multiply that out for the year it has my tax burden at close to $4000. If I understand this whole thing correctly, that means I get $3333 tax credit for the next 3 years.

This is different from the feds who are just going to give me an $8000 tax rebate (god bless those wonderful folks).

If I am misunderstanding someone please let me know??

I will be first in line May 3rd when I close (nothing is going to go wrong)! I am doing the happy dance already….I love the government!

Reality is I would have bought anyway, so it is a bonus (or is it big enough to be a windfall?).

[treehugger]

I don’t see the problem? I am going to get the full amount.

I don’t make huge money, but I just looked at my paystub from a few weeks ago and it was already over $1000, if I multiply that out for the year it has my tax burden at close to $4000. If I understand this whole thing correctly, that means I get $3333 tax credit for the next 3 years.

This is different from the feds who are just going to give me an $8000 tax rebate (god bless those wonderful folks).

If I am misunderstanding someone please let me know??

I will be first in line May 3rd when I close (nothing is going to go wrong)! I am doing the happy dance already….I love the government!

Reality is I would have bought anyway, so it is a bonus (or is it big enough to be a windfall?).

[treehugger]

I don’t see the problem? I am going to get the full amount.

I don’t make huge money, but I just looked at my paystub from a few weeks ago and it was already over $1000, if I multiply that out for the year it has my tax burden at close to $4000. If I understand this whole thing correctly, that means I get $3333 tax credit for the next 3 years.

This is different from the feds who are just going to give me an $8000 tax rebate (god bless those wonderful folks).

If I am misunderstanding someone please let me know??

I will be first in line May 3rd when I close (nothing is going to go wrong)! I am doing the happy dance already….I love the government!

Reality is I would have bought anyway, so it is a bonus (or is it big enough to be a windfall?).

[treehugger]

I don’t see the problem? I am going to get the full amount.

I don’t make huge money, but I just looked at my paystub from a few weeks ago and it was already over $1000, if I multiply that out for the year it has my tax burden at close to $4000. If I understand this whole thing correctly, that means I get $3333 tax credit for the next 3 years.

This is different from the feds who are just going to give me an $8000 tax rebate (god bless those wonderful folks).

If I am misunderstanding someone please let me know??

I will be first in line May 3rd when I close (nothing is going to go wrong)! I am doing the happy dance already….I love the government!

Reality is I would have bought anyway, so it is a bonus (or is it big enough to be a windfall?).

[EconProf]

Treehugger, your last statement is telling…”I would have bought anyway…”
So let’s see, the bankrupt CA government is about to hand you a bundle of $1000s to do something you were going to do anyway. All to “support” housing prices and thus further make buying that first house more unaffordable for those faithfully renting and saving up for their down payment. And BTW, Sacramento will soon have to raise taxes on all of us, including those renters, to pay for those subsidies.
Ah that CA legislator and and governor, sure glad they are on our side.

[EconProf]

Treehugger, your last statement is telling…”I would have bought anyway…”
So let’s see, the bankrupt CA government is about to hand you a bundle of $1000s to do something you were going to do anyway. All to “support” housing prices and thus further make buying that first house more unaffordable for those faithfully renting and saving up for their down payment. And BTW, Sacramento will soon have to raise taxes on all of us, including those renters, to pay for those subsidies.
Ah that CA legislator and and governor, sure glad they are on our side.

[EconProf]

Treehugger, your last statement is telling…”I would have bought anyway…”
So let’s see, the bankrupt CA government is about to hand you a bundle of $1000s to do something you were going to do anyway. All to “support” housing prices and thus further make buying that first house more unaffordable for those faithfully renting and saving up for their down payment. And BTW, Sacramento will soon have to raise taxes on all of us, including those renters, to pay for those subsidies.
Ah that CA legislator and and governor, sure glad they are on our side.

[EconProf]

Treehugger, your last statement is telling…”I would have bought anyway…”
So let’s see, the bankrupt CA government is about to hand you a bundle of $1000s to do something you were going to do anyway. All to “support” housing prices and thus further make buying that first house more unaffordable for those faithfully renting and saving up for their down payment. And BTW, Sacramento will soon have to raise taxes on all of us, including those renters, to pay for those subsidies.
Ah that CA legislator and and governor, sure glad they are on our side.

[EconProf]

Treehugger, your last statement is telling…”I would have bought anyway…”
So let’s see, the bankrupt CA government is about to hand you a bundle of $1000s to do something you were going to do anyway. All to “support” housing prices and thus further make buying that first house more unaffordable for those faithfully renting and saving up for their down payment. And BTW, Sacramento will soon have to raise taxes on all of us, including those renters, to pay for those subsidies.
Ah that CA legislator and and governor, sure glad they are on our side.

[livinincali]

After itemizing taxes especially with the mortgage interest deduction you’d probably have to make a little over $100K gross to get the full credit. For example you could pay CA 4,000 dollars, normally get back 1,200 and then the tax credit would be worth 2,800 instead of 3,333. I guess the way to look at it is you won’t be paying CA taxes for the next 3 years but that might not add up to 10,000.

The other thing to think about is the stipulation in the bill that if too many people take the credit then the amount you receive will be reduced. I.e. the first time buyer credit can be reduced to a total of 5,700 or 1900 a year if too many people take it and the money runs out. There’s 100 million dollars for the first time buyers credit but it’s difficult to estimate how far that money will go because not everyone will get the full amount. I’d assume that once 15K to 20K homes are sold to first time buyers there will be some deduction in payment.

[livinincali]

After itemizing taxes especially with the mortgage interest deduction you’d probably have to make a little over $100K gross to get the full credit. For example you could pay CA 4,000 dollars, normally get back 1,200 and then the tax credit would be worth 2,800 instead of 3,333. I guess the way to look at it is you won’t be paying CA taxes for the next 3 years but that might not add up to 10,000.

The other thing to think about is the stipulation in the bill that if too many people take the credit then the amount you receive will be reduced. I.e. the first time buyer credit can be reduced to a total of 5,700 or 1900 a year if too many people take it and the money runs out. There’s 100 million dollars for the first time buyers credit but it’s difficult to estimate how far that money will go because not everyone will get the full amount. I’d assume that once 15K to 20K homes are sold to first time buyers there will be some deduction in payment.

[livinincali]

After itemizing taxes especially with the mortgage interest deduction you’d probably have to make a little over $100K gross to get the full credit. For example you could pay CA 4,000 dollars, normally get back 1,200 and then the tax credit would be worth 2,800 instead of 3,333. I guess the way to look at it is you won’t be paying CA taxes for the next 3 years but that might not add up to 10,000.

The other thing to think about is the stipulation in the bill that if too many people take the credit then the amount you receive will be reduced. I.e. the first time buyer credit can be reduced to a total of 5,700 or 1900 a year if too many people take it and the money runs out. There’s 100 million dollars for the first time buyers credit but it’s difficult to estimate how far that money will go because not everyone will get the full amount. I’d assume that once 15K to 20K homes are sold to first time buyers there will be some deduction in payment.

[livinincali]

After itemizing taxes especially with the mortgage interest deduction you’d probably have to make a little over $100K gross to get the full credit. For example you could pay CA 4,000 dollars, normally get back 1,200 and then the tax credit would be worth 2,800 instead of 3,333. I guess the way to look at it is you won’t be paying CA taxes for the next 3 years but that might not add up to 10,000.

The other thing to think about is the stipulation in the bill that if too many people take the credit then the amount you receive will be reduced. I.e. the first time buyer credit can be reduced to a total of 5,700 or 1900 a year if too many people take it and the money runs out. There’s 100 million dollars for the first time buyers credit but it’s difficult to estimate how far that money will go because not everyone will get the full amount. I’d assume that once 15K to 20K homes are sold to first time buyers there will be some deduction in payment.

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