There was a really good article on the Wall Street Journal on March 18th, about how the new  tax credits work for 'First Time Home Buyers'.

For the whole story, here's the link:
http://online.wsj.com/article/SB123732757823462281.html

And here's a recap of what this tax credit is all about:

MAKING SENSE OF THE STORY FOR CONSUMERS 

·       First-time home buyers – those who have not owned a principal residence for three or more years – received two tax credits over the last two years.  One was passed and signed into law in 2008, the other in 2009.

·      The 2008 credit is a tax credit for first-time home buyers who purchased a house between April 8 and Dec. 31, 2008.  The home buyer may claim 10 percent of the home’s purchase price, as a credit, capped at $7,500.  Although called a “tax credit,” this homeowner benefit actually is a 15-year interest-free loan, which must be paid back in equal installments over a 15-year period.

·      The 2009 credit is for 10 percent of the home’s purchase price, capped at $8,000.  This credit is for first-time home buyers who purchase a house between Jan. 1 and Nov. 30 of this year.  The $8,000 tax credit does not have to be repaid.

·      In both cases, the home buyer may choose to claim the tax credit on either the 2008 or 2009 federal tax return.

·      The tax credits are offered on a sliding scale, based on income.  Individuals with annual incomes of $75,000 or less may be eligible for the full amount of the tax credit.  Married couples filing jointly must earn less than $150,000 to qualify for the full amount.  Individuals earning between $75,000 and $95,000, and married couples filing jointly who earn between $150,000 and $170,000, may be eligible for a smaller portion of the tax credit, but not the full amount.  The tax credit is not available to individuals who earn more than $95,000 or married couples filing jointing who earn more than $170,000.

·      Nonresident aliens, homes outside of the United States, and homes inherited, gifted, or acquired from a relative are exempt from the tax credits.

We are here to help you find your new home, please contact us if you have any questions.
http://www,ochomebuyer.com