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Home Buyer Tax Credit Facts

The Federal home buying tax credits have expired but review the two Kentucky programs still available. Contact us for more information.

The New Home Tax Credit is a nonrefundable credit, up to $5000, against individual income tax allowable to a qualified buyer, provided a cap of $25,000,000 for all approved New Home Tax Credits has not been met.

• The up to $5,000 state income tax credit can be applied against state tax liability for the purchase of a new, not previously occupied home in the state of Kentucky.

• To qualify you must fax the New Home Tax Credit form to the Department of Revenue at (502) 564-3706 within seven (7) days of the closing.

• The tax credit is non-refundable, meaning you will not receive a refund of any unused portion and may not be carried forward or backward to another year.

• The home purchased must be a single family dwelling that will be used as the primary residence for at least two years.

• New homes must be purchased, with a complete sale by July 26, 2010 to qualify.

To Apply For the Credit:

  • Submit a Kentucky Form 40A103 Application for New Home Tax Credit application via fax within seven (7) calendar days of the escrow closing between the buyer and the seller.
  • Kentucky Form 40A103 may be accessed via link to application.
  • FAX to the Department of Revenue at (502) 564-3706

A Mortgage Credit Certificates (MCC) reduces the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan. MCCs are NOT mortgages. They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment.

• Through the Kentucky Housing Corporation, the federal government allows first time homeowner an income tax deduction for part of the interest paid each year on a mortgage loan. The Mortgage Credit Certificate gives you a tax credit of up to $2,000 each year (25% of total interest), which reduces the amount of federal income tax you pay and puts more money in your pocket during the year.

• The credit can be taken for the life of the loan. If you sell your home before nine years you could be subject to a Federal Recapture Tax

MCC Brochure

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