Many people are still wondering what the $8,000 tax credit is all about so we have put $8,000 tax credit by Derrick Monroetogether a quick Q&A of the most common questions.

Q: What type of home purchases qualify for the first time home-buyer credit?

A: Any home located within the United States that is a primary residence. You must buy the home before Dec 1, 2009 to qualify for the first time home buyer credit.

Q: What is the tax credit anyway?

A: The American Recovery and Reinvestment Act of 2009 provides a tax credit up to $8,000 for the purchase of a principle residence on or after January 1, 2009 and before Dec 1, 2009.

Q: Do I need to repay the credit?

A: No – unless your house ceases to be your primary residence within 36 months of the purchase date.

Q: How much is the credit?

A: The credit is 10% of the purchase price with a max of $8,000.

Q: Can I use it for a rental property?

A: No

Q: How do I apply?

A: The credit is on IRS form 5405 and just file it with your tax return. As always consult with your attorney or tax professional as well.

Q: Are there income limits?

A: Yes – It will phase out at higher incomes. Full credit for married couples at $150,000 or less and single parties at $75,000 or less.

If you’re in the market as a first time home buyer and want to take advantage of the tax credit of $8,000 please contact us before time runs out. There is no commission expense to you as a buyer so take full advantage of an agent in your corner who works with first time home buyers and can get you the exact house you are looking for.

With the housing prices at very affordable prices and interest rates low the tax credit is just another great reason to get out of renting and start the path to home ownership.