If you have closed on a home or will close on a house between April 9, 2008, and June 30, 2009, you may qualify for the tax credit. It can be any house new or old, in any location or condition, and within any price range as long as it is purchased during the designated time period
Basically, Congress is offering tax credits to pull in new purchasers in order to jump-start housing sales and clear out unsold real estate inventories.
Close on a house before next June 30, and you can claim a credit of up to 10 percent of the purchase price of the property up to a maximum of $7,500. If your adjusted gross income exceeds $150,000 ($75,000 for singles), the credit maximum begins to phase down in increments. You cannot claim the credit if you are a nonresident alien, financed the property using a state or local housing agency tax-exempt bond mortgage, or do not plan to use the house as your principal residence. Purchasers in the District of Columbia using the city's first-time buyer credit program cannot double-up and use the new federal credit as well.
After you’ve purchased the home, the IRS will cut up to $7,500 off your tax bill for either this year or next. What’s more, the new home purchase tax credit is what the government calls "refundable." If your tax bill is less than the credit amount, you get the difference back from the Treasury. For example, if you're an eligible buyer of a home this year and you owe the IRS $4,000 on your total 2008 income tax bill, the $7,500 tax...