Tax Credit Extended

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500:

First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000.

Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time homebuyers and $6,500 for repeat buyers.

First-time homebuyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.

Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.

Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.

Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.

Since I am not a CPA or lawyer, please check with your tax advisor and lawyer as needed.