8,000 Reasons to Buy a First Home

First-time home buyers who contract to purchase a home between November 9,2009 and April 30th, 2010 may be eligible to take advantage of an $8,000 tax credit as part of the Worker, Homeownership, and Business Assistance Act of 2009.

Qualifying first-time home buyers may claim a tax credit of ten percent of the purchase price up to $8,000.

For those buyers who are not first time home buyers, the Worker, Homeownership,and Business Assistance Act of 2009 has established a tax credit of up to $6500 for qualified move-up / repeat home buyers. Qualified buyers are identified as having owned and resided in a home for at least 5 consecutive years of the eight years prior to the purchase date. Married buyers must both qualify in order to receive the tax credit.

The tax credit begins to phase out for those whose adjusted gross income exceeds $125,000 or $225,000 for joint filers.  Buyers must have a fully executed contract to purchase a home on or before April 30,2010 and close prior to June 30, 2010 to be eligible. The credit may be claimed on a home buyer's 2009 or 2010 tax return.

The IRS has posted a revised version of the form required to claim the credit, Form 5405, on IRS.gov. Visit the IRS First Time Homebuyer Page.