First-Time Homebuyer Credit

You may be able to take this credit if you bought a main home in the United States after April 8, 2008, and did not own any other main home during the 3-year period ending on the date you bought the home. If you constructed your main home, you are treated as having bought it on the date you first occupied it. However, you cannot take the credit if your modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly). If you bought the home in 2009 before July 1, you can take the credit on either your 2008 or 2009 return.

The credit is equal to 10 percent of the home purchase price, up to a limit of $7,500.

Unlike other tax credits, this one must be paid back to the government. The credit operates much like an interest-free loan. You generally must repay it over a 15-year period.

Money Saving Tip. You get the money only after you claim the credit on either your 2008 or 2009 tax return, NOT when escrow closes on the home.

However, if you buy a home in 2009, prior to July 1. Instead of waiting until you file your taxes in 2010, you can after Dec. 31, 2008 treat the purchase as if it were completed in 2008. That means you can amend your 2008 return and get the credit in 2009.