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To be eligible, individuals must be first‐time homebuyers, meet the programs income and purchase price restrictions, and use the home as his/her primary residence. MCCs generally are subject to the same eligibility and targeted area requirements as Mortgage Revenue Bonds (MRBs).
Use Form 8396 to figure the mortgage interest credit for 2023 and any credit carryforward to 2024. You can claim the credit only if you were issued a qualified Mortgage Credit Certificate (MCC) by a state or local governmental unit or agency under a qualified mortgage credit certificate program.
Youll need to itemize your deductions to claim the mortgage interest deduction. Since mortgage interest is an itemized deduction, youll use Schedule A (Form 1040), which is an itemized tax form, in addition to the standard 1040 form.
You can deduct home mortgage interest on the first $750,000 ($375,000 if married filing separately) of indebtedness. However, higher limitations ($1 million ($500,000 if married filing separately)) apply if you are deducting mortgage interest from indebtedness incurred before December 16, 2017.
The mortgage recording tax requires purchasers to pay 1.8% on mortgage amounts under $500,000 and 1.925% on mortgage amounts above $500,000 in NYC (this includes the recording tax for both New York City and New York State). NY state imposes a mortgage tax rate of 0.5%.
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A mortgage credit certificate allows qualifying homeowners to claim a refund for a portion of the interest paid on their mortgage each year, up to $2,000.