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1.To qualify for the 2009 First-Time Home Buyer Tax Credit, a home must be purchased in what time period?

The home must be purchased on or after Jan. 1, 2009 and before Dec. 1, 2009 to qualify. 

2.In order to qualify for the full $8,000 tax credit, the house must be at least what price?

Any home that is purchased for $80,000 or more will qualify for the full $8,000 credit. The credit is equal to 10 percent of the home's purchase price, up to $8,000. So if the house costs less than $80,000—say, $75,000—the credit will be 10 percent of the cost (in this case, a $7,500 credit). 

3.A first-time home buyer is defined as a buyer who hasn't owned a principal residence for how long?

A first-time home buyer is considered to be a purchaser who has not owned a home in the three years previous to the day of the 2009 purchase. So if the last time you owned a home was in 2005, you would be eligible for the tax credit, even though it's not technically your "first" home. Married joint filers must both meet this "first-time home buyer" requirement in order to claim the credit on a joint return. 

4.What is the income limit for claiming the full tax credit for married taxpayers filing a joint return?

Married couples filing jointly cannot have an income of more than $150,000 to qualify. If the couple makes more, they don't lose out entirely, though. The credit phases out for married couples (filing jointly) who earn $150,000 to $170,000 in annual income, with a smaller credit being awarded for the higher amounts. 

5.What is the income limit for claiming the full tax credit for a single taxpayer? 

Similar to married couples filing jointly, singles making more than $75,000 in annual income don't necessarily lose out entirely on the benefit of the credit. The credit phases out for single filers earning between $75,000 and $95,000.  

6.How is a home buyer’s income determined for tax credit eligibility?

For most individuals, “income” will be defined and calculated as Adjusted Gross Income (AGI) on their IRS 1040 income tax return forms. AGI includes wages, salaries, interest and dividends, pensions and retirement earnings, rental income, and several other elements. AGI is the number that appears on the bottom line of the front page of a 1040 form.   

7.What is the most significant difference between this tax credit and the one Congress approved in July 2008? 

The 2008 home buyer tax credit that Congress approved was basically an interest-free loan but it had to be repaid over 15 years, whereas the 2009 tax credit does not have to be repaid. The 2008 tax credit also had a limit of $7,500.   

8.What types of homes do not qualify for the tax credit? 

Basically any home that is used as a principal residence qualifies for the tax credit, including single-family houses, mobile homes, townhouses, condos, manufactured homes and even houseboats. Generally, you must spend 50 percent or more of your time in the home for it to be considered a principal residence.   

9.To claim the tax credit, you will need to: 

It's that easy: Just claim it on your federal income tax return; no pre-approval is necessary. Home buyers will need to complete IRS Form 5405 to determine their credit amount and then claim that amount on Line 69 of their 1040 income tax return. 

10.Which of the following statements about the tax credit is TRUE? 

The home must be a principal residence that is owned by the occupant, so vacation homes and rentals would not be eligible for the tax credit  

11.What if buyers are eligible for an $8,000 credit, but their entire income tax liability for the year is only $5,000? 

Any credit amount unused will be refunded as a check to the buyer. So the purchaser would receive the difference between the $8,000 credit amount and the amount of tax liability (so in the above case, a $3,000 refund). 

12.How long do owners have to stay in their homes without having to repay the tax credit? 

The home cannot be sold until three years after the purchase, or owners will be required to repay the tax credit. This is to prevent buyers from flipping properties in order to cash in on the credit.