By Marcie Geffner - Bankrate.com
The basic rules of the federal homebuyer tax credit are not difficult to figure out. But the credit, which has been amended and extended, also contains more than a dozen little-known twists and traps that can affect whether a buyer will or won't qualify for the full amount of up to $8,000 for first-time buyers or $6,500 for repeat homeowners.
Here are some facts homebuyers should know about the rules that became effective Nov. 7, 2009:
•The amount of the credit technically isn't $8,000 or $6,500, but rather 10 percent of the purchase price of the house up to those amounts for a buyer who hasn't owned a home in the last three years or a homeowner who has occupied the same principal residence for five consecutive of the last eight years, respectively. For example, if the home cost $50,000, the maximum credit amount would be $5,000, not $8,000 or $6,500.
•Buyers can elect to claim the credit on their 2009 or 2010 tax return, whichever is more advantageous for them. Buyers who claim the credit on a 2009 return must file on paper forms, not electronically. Expect to wait 12 to 16 weeks for a refund from an amended 2009 tax return.
Read on: http://www.bankrate.com/finance/mortgages/secrets-of-the-homebuyer-tax-credit-1.aspx