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Home Buyer Credit Widely Used

and

The Taxpayer Relief Act of 1997 provided federal taxpayers who have not recently owned a home
in the District of Columbia a tax credit of up to $5,000 of the amount of the purchase price of a
principal residence in the District. The credit is available for home purchases from August 6, 1997
through December 31, 2000. The credit is not available for single individuals with incomes of more
than $90,000, or for married couples with incomes in excess of $130,000. For singles, the credit is
reduced by 25 cents for each dollar of income that exceeds $70,000; for married couples the credit
phase out begins at incomes over $110,000. The credit is not refundable and is only creditable against
federal tax liability. Under current law, a family of four with approximately $25,000 of adjusted gross
income does not have any federal tax liability and would not be able to claim the credit. The credit,
however, can be carried forward to future years if the tax liability is not sufficient.

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