1.    The Credit is equivalent to 10% of the purchase price of the home, but is capped at $8,000. Does not have to be repaid.

2.    Applies to First Time Homebuyers who have not owned a principal residence for 3 years before buying a home.(Excludes vacation homes, but is not applied to vacation homes or investment properties)

3.    Home must be purchased between January 1 and December1, 2009 to be eligible for the credit. Anyone who bought a home last year will not be able to take advantage of this.

4.    Income Limits: Single buyers need an adjusted gross income of $75,000 or less to qualify for the full credit, married couples, $150,000. Those earning more than these thresholds may be eligible for reduced credits.

5.    Refundable: Because the tax credit is “refundable”, qualified buyers can take advantage of it even if they have much tax liability.

6.    Recapture: Buyers have to own the home for at least 3 years in order to capitalize on the credit. If they sell the home before this, they will have to return the credit to the government.(exceptions will be made in certain cases, such as death or divorce)

7.    To file: You may claim this credit on your return – no other papers have to be filed. You can claim on your 2008 or 2009 return.