As you’ve probably heard, the federal government recently passed a tax credit available to first-time homebuyers.  Although the tax credit is pretty straightforward, there are a few little quirks that you should know about:
  

1.  Who is a “first-time homebuyer”?  The government considers a “first-time” buyer to be anyone who has not owned a home for the past three years – so, in reality, the tax credit is available to people who previously owned homes, as long as they haven’t been homeowners since about 2006.

 
2.  When does the home have to have been purchased?  The tax credit only applies to homes that are purchased between January 1, 2009 and December 1, 2009.

3.  How much of a tax credit can you receive?  The stimulus bill allows first-time buyers to claim a tax credit on their 2008 or 2009 taxes for $8,000 OR 10% of the home’s value, whichever is less.  That means that homes worth less than $80,000 will receive a tax credit of less than $8,000.

4.  Are there any income restrictions on who can take the tax credit?  Yes.  Full credit is only available to first-time buyers that earn less than $75,000 for singles, or $150,000 for couples.  However, a partial credit may be available to singles or couples that earn more than the income ceiling.

5.  How do I claim the tax credit?  It’s easy!  Just claim it on your return – and if you’re really ambitious and have already filed your return, then you can just file an amended return to take the tax credit.
 
6.  Will I have to pay back the tax credit?  Maybe.  Basically, the tax credit is yours to keep unless you live in the home for less than 3 years – then you have to pay it back.

Pretty cool, right?  The tax credit is a great and unique deal available to you first-time buyers, so definitely be sure to take advantage of it on your tax returns!  To find out a little bit more about the tax credit and how it might apply to you, just click here.