Hello and welcome to Money Girls Quick and Dirty Tips for a richer life.

I'm your host Laura Adams. In this episode I'll discuss the new and improved tax credit

that's available for homebuyers. In Show 110 I discussed the new homebuyer tax credit.

I mentioned that some changes to this benefit might be coming soon due to proposed

legislation. Well the IRS just announced that they have expanded this tax break for 2009 purchases

to incorporate provisions from the American Recovery and Investment Act that was recently signed into law.

Let's review the credits so you're fully up to speed on the differences.

The new and improved tax credit is only for home purchases completed from January 1st to December 1st of 2009.

The old credit that I discussed in Show 110 now applies to purchases completed from April 9th through

December 31st of 2008.

To be considered a first timer for the purposes of either the 2008 or 2009 tax credit, you must not have owned a home for three years prior to your purchase.

For example, let's say you bought a primary residence on January 10th of 2009.

If you and your spouse if you're married

didn't own a home after January 10th of 2006,

congratulations. You can consider yourself a first-time homebuyer once again.

However, the credit amount you'll receive is reduced if your adjusted gross income is more than $75,000 or $150,000 if you're married filing jointly.

You're not eligible for the credit at all if your adjusted income exceeds $95,000 or $170,000 for joint filers.

Qualifying taxpayers who purchase a home from January 1st to December 1st of 2009 can claim 10% of the purchase price up to $8,000 or

4,000 for those married and filing separately. This is $500 more than the credit amount for

qualifying purchases in 2008. The new credit isn't as large as many had hoped it

would be but its terms make it a substantial improvement.

This is because the new 2009 credit is a real credit.

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