Kentucky tax tidbit: $5K new home credit
Sunday, March 07, 2010
The official song is My Old Kentucky Home, but the Bluegrass State is singing a special tax tune for residents who buy new houses.
Kentucky's New Home Tax Credit is available to eligible individuals who purchase a new primary residence between July 26, 2009, and July 25, 2010.
The tax nonrefundable credit, meaning it can zero out your Kentucky tax bill but it won't get you cash back if you have more credit than tax due, can be as much as $5,000.
The key word here is "new." This tax break is available only for folks who buy a new, previously unoccupied single-family dwelling. Once purchased, you have to live there for two years.
And in addition to the July-to-July time frame for the purchase, there's also a time consideration in applying for the credit.
You have to submit, via fax, an application form for the credit within seven days of closing. If you're approved, the Kentucky Department of Revenue will send you a credit allocation letter with a four-digit approval code. When you file your return in April, attach the letter to your return.Potential new home credit claimants also need to keep an eye
Interesting approach. The time limit plus dollar cap is sort of the tax department's answer to car warranties available up to a certain mileage limit or within a specific time frame, whichever comes first. It might be worth looking into, Uncle Sam. Just sayin'.
The latest info per Kentucky's Web site this afternoon (March 7) is that just over $4 million has been claimed, leaving almost $21 million for filers. The state says the last application it processed was on Thursday, March 4.
So it looks like there's still plenty of time and money for folks who want to trade in an old house for a new Kentucky home.
Tax trip around the United States: This post is part of our series highlighting tax information from the 50 U.S. states and Washington, D.C. You can read other state tax blurbs at our Complete menu of tasty state tax tidbits.
The State Tax Departments page provides links to official state
and District of Columbia revenue Web sites so that you can find out more about
your home's tax laws and filing requirements.
As we work through the 2010 tax season, a different state will be featured each day as noted in Don't forget your state taxes! Check back to see what tax tidbit we share about your home.
- House hunting? Check out tax credit
- State Tax Tidbits
- State Tax Departments
- Don't forget your state taxes!
- 9 states of no-tax note ... sort of
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I think that Kentucky’s new tax credit will benefit new couples who are just starting out their marriage life as well as old couples who plan to retire in Kentucky. With the tax credit, I plan to use it for my application on Harvard’s accounting degrees online. $5,000 is a big amount especially today with market prices reaching higher than the minimum wage of a person. Although living in Kentucky for two years is something to take into consideration. What if your career, demands that you travel to other places and settle there? Clearly, before buying a new house, one should think about that clause before deciding in the end.
Posted by: accounting degrees online | Sunday, October 10, 2010 at 10:27 PM
Whoa, it's interesting about the $25 million cutoff! But it's great because now some well deserving people will get the break that they were looking for. With the economy as bad as it is, this will certainly give something back :-)
Posted by: earn money from home | Monday, August 09, 2010 at 12:19 AM
I have the same question as missy with regards to children, but also is there a time when this will expire?
Posted by: Scentsy Bricks | Thursday, July 08, 2010 at 07:46 PM
When you say "new" home do you mean new construction?
Posted by: Lanterns4Less | Thursday, June 03, 2010 at 03:22 PM
our accountant told us that it is $1000 less because our son is 17 now, he is still a full time high school student, is this correct?
Posted by: missy | Monday, March 22, 2010 at 09:42 AM