First-Time Homebuyer Credit

First-time homebuyers may be able to take advantage of a tax credit for homes purchased in 2009. The credit:

• Applies to purchases that close after before Dec. 1, 2009.
• Applies only to homes used as a taxpayer's principal residence.
• Reduces a taxpayer's tax bill or increases his or her refund, dollar for dollar.
• Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.

A credit up to $8,000 may be claimed using using Form 5405.

For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer's main residence within a three-year period following the purchase.

For more information, please visit http://www.irs.gov/newsroom/article/0,,id=204671,00.html