It’s a credit for 10% of the cost of your new home, up to a limit of $8,000. Only first-time home buyers qualify and you’re considered a first time home buyer if you have not owned a home for three of the last five years. Individuals are eligible for the credit if their income is no more than $75,000. For married couples, the limit is $150,000. Individuals who earn up to $95,000 and couples that earn up to $170,000 can still can still get a tax credit, based on a sliding scale. Unlike the 2008 credit, there is no repayment requirement and no pre-purchase authorization. You simply claim the credit on your 2009 tax return, on the new IRS form 5405. You have to buy and close on your home before December 1, 2009 to be eligible.

Congress has passed new legislation that extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010 AND expands the credit up to a $6,500 credit to current home owners purchasing a home between November 7, 2009 and April 30, 2010. Here are some common questions & answers about the extended tax credit:

Who qualifies for the extended credit? First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010. Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight years. To qualify as a “first-time home buyer” you may not have owned a residence during the three years prior to the purchase.

Which properties are eligible? The Extended Home Buyer Tax Credit may be applied to all primary residences, including: single-family homes, condos, and townhomes.

How much is available and how is the amount of my credit determined? The maximum credit for first-time home buyers is $8,000. The maximum credit for current homeowners is $6,500. The amount of your tax credit is determined by two factors: The price of the home and your income. The credit may only be awarded on homes purchased for $800,000 or less. Single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum tax credit. The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as your income approaches the maximum limit. Home buyers earning over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can I still qualify if I close after April 30, 2010? Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, you will have until July 1, 2010 to close.

Will the tax credit need to be repaid? No. You do not need to repay the tax credit, if you live in the purchased home for three years or more. However, if you sell the home during this three-year period, the full credit amount will be recouped on the sale.