Who is eligible to claim the tax credit?

• First-time homebuyers who have not owned a principal residence in the past three years may be eligible for up to $8,000 in tax credits.

• Existing homeowners who have lived in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.

• All U.S. citizens who file taxes, and fall within the income limits, are eligible to participate in the program.

When is deadline for purchasing a home?

• Homes must be purchased after Nov. 6, 2009, and before May 1, 2010.

• Home purchases under a binding sales contract signed by April 30, 2010, will qualify for the tax credit, provided they close within 60 days.

• First-time homebuyers who closed after January 1, 2009 and before December 1, 2009 qualify for the original $8000 tax credit.

Are there any income limits for claiming the tax credit?

• Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.

• For married couples filing a joint return, the combined income limit is $225,000.

• Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

• The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

What types of homes will qualify for the tax credit?

• All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

I read that the tax credit is "refundable." What does that mean?

• A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

Can you give an example of how the tax credit works?

• A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).

• A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).

• All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.