I only owe $2,000 in income tax, how will the first-time homebuyer tax credit help me?
Because the $8,000 tax credit is considered a “refundable tax credit”, not only does the $8,000 figure go towards reducing your taxes, it will also provide you a refund up to $8,000 over the amount you owe. Thus, it can really help towards making a down-payment on your first home because you will receive a check for the amount above what you owe in taxes. Thus, if you owe $2,000 in taxes you will receive a check for $6,000. If you have no tax obligation, you will receive a check for $8,000.
