Certain Members of the military and federal employees who were serving outside the U.S. during the Tax Credit period have until April 30, 2011 to buy a principal residence in the U.S. and qualify for the credit.

• The tax credit for First-Time Buyers is 10% of the purchase price up to a maximum of $8,000 ($4,000 married filing separately). As an example, the tax credit on a $75,000 home would be limited to $7,500. The tax credit on homes purchased for $80,000, or more, would be limited to $8,000. The tax credit for Current Homeowners is $6,500 ($3,250 married filing separately)
• $125,000 taxable income limit for individual tax filiers. The tax credit Diminishes to $0 pro-rata as taxable income approaches $145,000
• $225,000 taxable income limit for joint tax filers. The tax credit diminishes to $0 pro-rata as taxable income approaches $245,000.
• The home must be under-contract before April 30, 2010 and closed before July 1, 2010. First-Time Buyers may not have had an interest in a principal residence for the 3 years prior to purchase. Current Homeowners must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years.
• The tax credit does not have to be repaid providing the buyer(s) use the home as a primary residence for at least 3 years immediately following purchase.

What if your income tax due is less than the $8,000 tax credit? If you only owe $6,000 in taxes and otherwise meet the tax credit home buyer requirements, you will receive the $6,000 tax credit and a tax refund check for $2,000.

Some lenders may allow all or part of the tax credit to be applied toward your closing costs, but not toward the downpayment requirements. Check with your lender for tax credit limitations. You do not lose the remainder of your tax credit if you apply some toward your closing costs.