The temporary credit is only available for

home purchases made from Jan. 1, 2009 to

before Dec. 1, 2009 and is equal to 10 percent

of the cost of the home, up to a maximum

credit of $8,000.

Buyers claim the credit on their federal tax

return to reduce their tax liability. If the credit

is more their total tax liability that year, the

buyer will get a refund check for the balance.

Only first-time homebuyers can take advantage

of the tax credit. A first-time buyer is

defined under the tax credit as an

individual who has not owned a home

in the last three years. For married joint

filers, both must meet the first-time

homebuyer test to take the

credit on a

joint return.

Eligible properties include anything that will

be used as a principal single-family residence—

including condos and townhouses.

There are income guidelines on the credit. Individuals

with an adjusted gross income up to

$75,000 (or $150,000 if filing jointly) are eligible

for the full tax credit. The credit is

phased down for those earning more and is

not available for those with an income above

$95,000 (or $170,000 if filing jointly).

The new tax credit does not have to be repaid

if the buyer stays in the home at least three

years. But if the home is sold before that, the

entire amount of the credit is recaptured on

the sale.

People who purchased homes under the

2008 $7,500 tax credit program will still be

required to repay that credit to the government

over a 15-year period.

The American Recovery and Reinvestment Act of

2009 features an $8,000 tax credit for first-time

buyers who purchase a home on or after Jan. 1, 2009

and before Dec. 1, 2009.

Details of the tax credit include:

First-Time Homebuyer

Tax Credit

Consult with your REALTOR® or tax advisor

and visit www.YourIllinoisHome.com to learn

more about the tax credit and state and

federal loan programs.

What you should know about the

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