Home Front

A blog about the economy and the Sacramento-area real estate market.

February 9, 2010
Sacramento buyers claim surprise at tiny California tax credit
By Jim Wasserman
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This question comes from a summer 2009 home buyer in Lincoln who just got his taxes done and says he's getting nowhere near a $3,333 state tax credit.

In fact his tax 2010 credit will be something along the lines of $300, he said.
 
"What's the deal? I thought I was getting a $10,000 tax credit over three years?"

We put the question to the California Franchise Tax Board
What gives?

Spokeswoman Brenda Voet said the size of the tax credit will depend on the buyer's tax situation.

The most simple way to understand it, she said is this: "It's a dollar for dollar credit for taxes owed."

That means if you owe $300 in state taxes you get a credit for the $300.

If you make $200,000 a year and owe $4,000 in state taxes you get a credit for $3,333 and pay only $667 in state taxes.

 You do not get money back from the state - over and above what you owe, she said.

Here at Home Front, we expect there to be more calls like this. It was always billed as a $10,000 tax credit and people in sales offices told buyers that's what they would get.

Now the fine print may disappoint some people.

Meanwhile, three bills to extend a similar tax credit into this year's buying season have been introduced and are pending before the Legislature.

Photo courtesy of lookpdf.com




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