In recent months, the federal government implemented one of the biggest financial incentives in history to assist 
first-time home buyers. Those who qualify for the credit can get up to $8,000. In order to get the tax credit, you have to know the rules. Here is a brief rundown of what you need to know about the home buyers tax credit:
December 1, 2009 – An Important Date
To qualify for the home tax credit, you must have purchased and closed on your home before December 1, 2009. If you are building a new home, you must be moved in to the home before December 1st. There is a possibility that Congress will extend the date for the tax incentive but in the event you are planning to take advantage as a first-time home buyer, don’t count on the extension.
First Time Home Buyers Only
Interestingly, this requirement isn’t as exactly cut and dry as it seems. For instance, if you purchased a home 15 years ago and sold it 10 years later and haven’t owned since, you can be considered a first-time home buyer and qualify for the tax credit. As long as you have not owned a home within three years of he date your purchased a home, you’re good to go.
Your Income May Count Against You
Depending on your income level, you may not get the full amount of the tax credit. You may still qualify for a partial credit if you make more than $75,000 single/$150,00 married.
Don’t Count on $8K
The maximum amount you can receive in credit is $8000 OR 10% of the purchase price of your home – whichever is less. Depending on the price of your home, you’ll have to do the math.
Don’t Pay-Backsies
In 2008, anyone who used the first time home-buyers credit had to pay it back over a period of 15 years. The 2009 version however does not have to be paid back and the credit is actually a refundable credit, meaning that if you only made a few thousand dollars and your total tax liability is only a few hundred for the year, your tax refund will increase by the full $8,000 credit, instead of being limited by your total tax liability. Please note: there is an exception to the no pay back rule. In the event you sell your home within a three year time period, you will have to pay pack the credit. This helps prevent flippers from abusing the system.
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