The 2009 First Time Homebuyer's Tax Credit is quite different from the one offered in 2008. One of the most important differences is that the 2009 tax credit does not have to be repaid.

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The 2009 First-Time Homebuyer's Tax Credit

The 2009 First Time Homebuyer's Tax Credit is quite different from the one offered in 2008. One of the most important differences is that the 2009 tax credit does not have to be repaid. If you're looking for homebuyer relief, the 2009 tax credit is quite an incentive to buy--even in a troubled housing market. But what do you need to know about this tax credit? There are many questions first time homebuyers need answers to before taking the plunge:

How does the IRS determine how much tax credit I am entitled to?

First time homebuyers in 2009 are entitled to a tax credit totaling 10% of the purchase price of the home. The maximum tax credit is $8000. Your amount may be less depending on the purchase price of your house.

The rules say to qualify, the purchasing date on my home must be between January 1, 2009 and December 1, 2009. (President Obama has signed off on the bill approving of the extension of the $8,000 New Home Buyer Tax Credit until April 30, 2010) How is the purchasing date determined?

Under the rules for the 2009 First Time Homebuyer's Tax Credit, your purchasing date is the date when you close on the house and the titled is transferred into your name. That date you qualified for the loan or signed the loan paperwork doesn't count. The date on your title is your purchase date.

I'm a first-time homebuyer but I want to buy a condo or townhouse. Can I still qualify?

Like many government programs such as FHA mortgages and VA loans, those who want to buy a condo or townhome are eligible for the 2009 tax credit. You can also take advantage of the 2009 First Time Homebuyer's tax credit if you're buying a manufactured home, mobile home or even a houseboat. Regardless of the type of home you want to buy, it must be purchased as your primary residence. Otherwise your home won't qualify for the tax credit.

Does that mean a summer home purchase doesn't qualify?

Yes. Summer homes are not considered primary residences.

What if I already purchased a home in 2009 and took the 2008 First Time Homebuyer's tax credit for $7500?

Under certain circumstances you may be able to file an amended tax return and claim the 2009 tax credit. You'll need to file a 1040X, but if you are unfamiliar with the procedure it may be wise to get professional tax help to make sure you file the amended return properly and claim the tax credit you are entitled to by law.

Is the 2009 First Time Homebuyer's Tax Credit a deduction? Do I get money back?

This program is not like other homeowner relief programs like the Obama Mortgage. The $8000 you may be entitled to this year is a tax credit--it reduces the amount of money you owe the IRS.

If you still have unanswered questions about the First Time Homebuyer's Tax Credit, ask a tax professional or your income tax preparer. Some situations may require additional paperwork or (as mentioned above) filing an amended tax return. Always get professional assistance if you don't understand how to fill out or properly file these documents with the IRS.