1. Definition of First Time Buyer - a buyer who has not
owned a principal residence during the three-year period prior to the purchase.
For married taxpayers, the law tests the homeownership history of both the home
buyer and his/her spouse.
2. Deadlines - home sales occurring by June 30, 2010,
provided they are in binding sales contract on or before April 30, 2010.
3. Amount of Tax Credit- The tax credit is equal to 10 percent of the home’s
purchase price up to a maximum of $8,000.
4. Income Limits - the income limit for single taxpayers is $125,000. The limit
is $225,000 for married taxpayers filing a joint return. Partial credit
eligibility up to $145,000 (single) or $245,000 (married).
5. How do you claim the credit? You claim the tax credit
on your federal income tax return. IRS Form 5405 will determine your tax credit
amount. No other applications are required, and no pre-approval is necessary.
Home buyers must attach a copy of their HUD-1 settlement form (closing
statement) to Form 5405 as proof of the completed home purchase.