As you all know, the $8,000 tax credit is scheduled to expire on 11/30 and while here are many rumors about an extension, nothing is set in stone yet.

Who Qualifies?

First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a "first-time home buyer" the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer�s tax credit is determined by two factors:

The price of the home�the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income�single buyers with incomes up to $75,000 and married couples with incomes up to $150,000�may receive the maximum tax credit.

If the Buyer(s) Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income�over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

How to Get the First-Time Home Buyer Tax Credit

You've decided to purchase a home and take advantage of the 2009 First-Time Home Buyer Tax Credit. Here's what you have to do to get your benefit:

1. Close on your home purchase by November 30, 2009
2. Ensure that you are a qualified first-time buyer under IRS guidelines
3. Decide which year to file under, 2008 or 2009
4. File an amended 2008 return or choose to apply the credit to your 2009 tax return

Deciding When to Apply the Credit

If you want the benefits of your credit as soon as possible:

You might choose to file under your 2008 tax year. Since April 15 has already passed, you would have to file an amendment to your return. However, if you've already filed for an extension of your 2008 return, then you can simply claim the credit when you submit your return.

If you anticipate a drop in income next year:

You can wait to claim the credit as part of your 2009 filing. In some cases the value of the credit might be higher, particularly if in 2008 you qualify for only a partial credit because your income is over $75,000 (single) or $150,000 (joint).

Your Next Steps

Once you have determined which year to apply the tax credit, you will need to do two things to claim the credit:

1. Fill out Form 5405 to determine the amount of your available credit, and
2. File an amended return for your 2008 taxes, or wait and apply to credit when you file your 2009 tax return.