California's Franchise Tax Board will cease accepting applications for the state's first-time existing home buyers' tax credit at midnight, Aug. 15, but will continue to take applications for the tax credit from buyers of new houses.
The agency has already received 31,460 applications for a share of the $100 million tax credit set aside by California lawmakers earlier this year.
That's likely to be more than enough to exhaust the fund. but because some applications may be invalid or duplicates, the tax board will continue to accept new applications through Sunday.
The tax board estimates that only 17,500 to 20,000 credit certificates can be awarded, and says that any remaining applications will be denied.
That means that possibly as many as 10,000 buyers who thought they would receive the credit — and perhaps were counting on it — will be rejected.
However, new home buyers appear to still have time to qualify for a share of the other $100 million set aside by the state legislature.
At last count, the tax board has received only 11,440 applications from new home buyers for an estimated total of not quite $75 million.
In both cases, the credit is limited to $10,000 or 5% of the purchase price, whichever is less, for the qualified purchase of a principal residence only.
The credits are available for taxpayers who purchase a qualified property on or after May 1 but before Jan. 1, 2011, and must be taken in three successive increments of no more than $3,333 over a three-year period.
Any unclaimed amount will not be returned.
All the figures reported by the tax board are only estimates because the agency's computer programs were not set up to handle the credit and have only just recently become up and running.
"We are now ready to process applications," the agency said in an update issued last week.
