First Time Home Buyers Credit and other Stimulus Package Tax Credits Explained

The first time home buyers tax credit is just one of 5 Stimulus Package benefits that will benefit the average American. Watch this video for a summary of 5 tax credit benefits for Americans as part of the the stimulus package.

Just based on the phone calls we have received today from Ann Arbor and Ypsilanti home buyers we are confident that the $8000 tax credit is going to have a strong impact on the buyer side of the Ann Arbor real estate market buyer/seller equation.

Here is a summary of the 5 stimulus plan tax credits along with a good video which clearly but briefly explains each one.

1. $400 tax credit. Under the stimulus plan, every worker will receive a payroll tax credit of up to $400.
2. $8,000 First time home buyer's tax credit. Before the plan's passage, home-buyers who bought a house between April 9 of last year and the end of June 2009, received a tax credit of 10% of the home's price, or a maximum $7,500. But that credit had to be paid back over 15 years. Now, as part of the stimulus, home-buyers who bought this year don't have to pay the money back. The credit is extended to those who buy a home through the end of August. It is expected to be worth as much as $8,000.
3. Improved unemployment benefits. Currently unemployed can now claim up to 33 weeks of benefits through December. Benefits will increase by $25 per week for some 20 million jobless workers. The first $2,400 in unemployment benefits you receive is also now exempt from federal taxes.
4. New car purchase sales taxes deductible. Purchase a new car and deduct state and local sales and excise taxes on purchase of up to $49,500.
5. American Opportunity Education tax credit - offers up to $2,500 toward college tuition and related expenses for 2009 and 2010. It replaces the Hope Scholarship Credit, which offered a maximum of $1,800. While the Hope Credit only applied to tuition paid for the first two years of post-secondary education, this law makes the new credit applicable to the first four years.

See CBS News for more details