## What is the Mortgage Interest Credit?
The mortgage interest credit (MIC) is a tax credit available to first-time homebuyers and certain other homebuyers who meet specific requirements. The MIC is a dollar-for-dollar reduction of your federal income taxes, up to a maximum of $2,000 per year.
### How does the MIC work?
The MIC is calculated as a percentage of the interest you pay on your mortgage loan each year. The percentage is equal to the lesser of:
* 10%
* The amount of your mortgage interest divided by your taxable income
For example, if you pay $6,000 in mortgage interest in a year and your taxable income is $50,000, your MIC would be $1,200 (10% of $6,000).
### Who is eligible for the MIC?
To be eligible for the MIC, you must meet all of the following requirements:
* You must be a first-time homebuyer, or you must not have owned a home in the past three years.
* You must occupy the home as your primary residence.
* Your mortgage loan must be for a principal residence that is located in the United States.
* Your mortgage loan must be secured by the home.
* You must have a valid Social Security number.
* Your income must be below certain limits.
### How do I claim the MIC?
To claim the MIC, you must complete Form 8396, Mortgage Interest Credit, and attach it to your federal income tax return. You can download Form 8396 from the IRS website.
### What are the benefits of the MIC?
The MIC can provide a significant tax savings for first-time homebuyers and certain other homebuyers who meet the eligibility requirements. The MIC can help you reduce your monthly mortgage payments and make homeownership more affordable.
### What are the drawbacks of the MIC?
The MIC is a non-refundable tax credit, which means that you cannot receive a refund for any unused portion of the credit. Additionally, the MIC is subject to income limits, which means that you may not be eligible for the credit if your income is too high.
### How can I learn more about the MIC?
You can learn more about the MIC by visiting the IRS website or by speaking with a tax professional.
## Conclusion
The mortgage interest credit can be a valuable tax savings for first-time homebuyers and certain other homebuyers who meet the eligibility requirements. If you are considering buying a home, you should speak with a tax professional to see if you qualify for the MIC.