Most have heard about the $8,000 tax credit for first time homebuyers. Here are a few tips to see if you are eligible and how to go about claiming it.

According to the National Association of Home Builders, you must have purchased a home from January 1 to December 1 of this year. To be considered a first time homebuyer, however, you only need to have not owned a home in the last three years. This is great news for those who have bought before, but have been out of the homeownership game for a while. The buyer must also "have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers."

To claim the credit, buyers complete IRS Form 5405 to calculate the amount of the tax credit, and enter it on line 69 of the IRS 1040 income tax return. And you can only make a claim once the purchase of the home is complete.

More information on the first-time home buyer tax credit can be found at www.federalhousingtaxcredit.com.

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Published: April 10, 2009

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