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Home > MCC -$2000 A Year for 30yrs
The Kentucky MCC Program!!
The MCC (Mortgage Credit Certificate) program is a state tax credit program currently available to qualified buyers. It allows a tax credit of up to 25% of the mortgage interest paid each year, not to exceed $2000, for qualified buyers, for each year of ownership during the term of the mortgage. The MCC is available to qualified first-time home buyers in all Kentucky counties and to all qualified homebuyers in certain areas, including Boyle County, Madison County, and Lincoln County.
Like the $8000 First-Time Homebuyer Tax Credit, the program is geared toward helping those who have never owned a home or have not owned a home in the last three years. However, the MCC program has the additional benefit of also being available to second-time or subsequent homebuyers in certain targeted areas, which include Boyle County, Madison County, and Lincoln County.
The MCC is a tax credit that is applied directly to the homebuyer's tax liability after all other credits and deductions, including the standard mortgage interest deduction have been applied. A tax credit differs from a deduction; whereas a deduction reduces the amount of the buyer's income that is subject to income tax, a tax credit is a direct reduction of the amount of taxes owed. The MCC can be used in combination with the $8000 First-Time Homebuyers Tax Credit or the $6500 Repeat Homebuyer Credit.
Unlike the $8000 credit, the balance of which can be paid directly to the buyer if the credit is greater than their total tax liability, the MCC is a non-refundable tax credit. This means that in order to ensure the full benefit of the MCC's tax credit, the buyer should reduce the amount of taxes being withheld from their regular paycheck. In other words, since this credit cannot be refunded the taxpayer if they have paid in more taxes than they owe, the taxpayer should reduce the amount of tax they are paying in during the tax year, so that a tax liability will exist at the end of the year. This will have the added benefit of giving the buyer more available cash in their paycheck during the year. The withholding change is simple to implement, and the credit has a three-year carryover, so the ideal withholding amount can be determined gradually.
Kentucky residents who are first-time homebuyers or who have not owned a home in three years, in any county. However, for buyers in Boyle County, Madison County, and Lincoln County, among other areas, the credit is also open to those who currently own a home or have owned one in the past three years. The buyer's income must fall within Kentucky Housing loan income limits. Limits vary by county and family size, here are some key examples:
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In Fayette, Woodford and Jessamine Counties, up to $65,000 for a one or two person household, or up to $74,750 for a household of three or more.
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In Scott and Clark Counties, up to $78,000 for a one or two person household, or up to $91,000 for a household of three or more.
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In Jefferson and Oldham Counties, up to $61,500 for a one or two person household, or up to $70,725 for a household of three or more.
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In Madison County, up to $69,960 for a one or two person household, or up to $81,620 for a household of three or more.
There is a $500 fee for the MCC, This fee can be paid by the buyer or seller.
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