The first-time homebuyer credit is designed to revive the housing market and provides incentives and tax breaks for certain home buyers and homeowners.

Worker, Homeownership, and Business Assistance Act of 2009
This Act extends the expiration date of the first-time homebuyer tax credit for homes purchased before May 1, 2010. The purchase of a principle residence by July 1, 2010 will also qualify if the taxpayer has entered into a binding written contract before May 1, 2010.

• First-time homebuyer – Taxpayers who have not owned a principal residence in the past three year period ending on the purchase date of a new home are eligible for a credit equal to the lesser of $8,000 or 10% of the purchase price of the home.
  
• Long-time residents – Taxpayers who have maintained the same principal residence for any five-consecutive-year period during the eight-year period ending on the purchase date of a new home are eligible for a maximum credit of $6,500. The purchase of a new home must be made after November 6, 2009.
  

For purchases before November 7, 2009, the credit is phased out for taxpayers with adjusted gross income between $75,000 and $95,000 for individual taxpayers, and $150,000 and $170,000 for married joint filers. The Act increases the AGI limitation between $125,000 and $145,000 for individuals, and $250,000 and $290,000 for married joint filers for purchases after November 6, 2009.

Click Here for a Summary of Prior and Current Legislation

Find Out Exactly How You're Affected
Determining exactly how the Worker, Homeownership, and Business Assistance Act will affect your tax liability – and what you should do to take full advantage of the act – can be tricky. Please contact your local Yeo & Yeo tax professional if you have any questions about this or other tax laws, or to talk about strategies you might implement to minimize your taxes for 2009 and beyond.