As the April 15 deadline to file 2009 federal tax returns approaches, the National Association of Home Builders (NAHB) is providing answers to some of the questions home buyers are most frequently asking about the home buyer tax credit.

“NAHB’s website that provides information about the home buyer tax credit, www.FederalHousingTaxCredit.com, has received more than 8 million visits,” said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. “We are doing everything we can to make sure home buyers are informed about this outstanding opportunity to benefit from buying a home before it expires April 30.”

Some of the more commonly-asked questions, and the answers, include:

1. How does a home buyer claim the tax credit?

The credit is claimed when the home buyer files or amends their federal income taxes. For qualifying homes purchased in 2009 or 2010, the taxpayer must complete IRS Form 5405 and attach a copy of the settlement statement. In most cases, the settlement statement is a properly executed Form HUD-1.

In circumstances where a HUD-1 is not provided, such as purchasing a mobile home or a newly constructed home, the IRS will accept an executed retail sales contract (mobile homes) or a copy of the certificate of occupancy (new homes).

2. Does the home buyer have to sell their current home in order to qualify for the $6,500 repeat home buyer tax credit?

A home buyer does not need to sell their current home in order to be eligible for the repeat buyer credit. They can continue to own both homes, and rent or use their former home for something else, as long as it no longer serves as their principal residence. The taxpayer is required to use the new home as their principal residence, and live in it for at least 36 months, or they will have to repay the credit.

3. Do married couples both have to meet the eligibility requirements in order to claim the credit, even if they file taxes separately?

Both spouses must fully meet all the eligibility requirements for either the $8,000 first-time home buyer tax credit or the $6,500 repeat buyer tax credit, regardless of if they file joint or separate tax returns. However, if an unmarried couple purchases a home and only one person qualifies, the eligible person may claim the full credit.

4. Do all home purchases need to be completed by April 30, 2010, in order to be eligible for the credit?

There are two exceptions to the April 30 deadline. If the buyer enters into a binding contract by the deadline, they have until June 30, 2010, to complete the purchase. The deadline has been extended a year, to April 30, 2011, for members of the uniformed services, Foreign Service or employees of the intelligence community who have been on qualified extended duty outside the United States for at least 90 days between January 1, 2009, and April 30, 2010.

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If you have been sitting on the couch and looking out your window contemplating making a move, then now is the time to do it. The hardest part of winter is over and the interest rates recently dropped below 5%. The inventory is great and it is still a buyer’s market. The federal government is still offering an $8,000 tax credit to first time homebuyers that qualify and a $6,500 tax credit to move up buyers that qualify, but the clock is ticking.  If you don’t have your next home under deposit by April 30th, then you have missed the incredible deal. Don’t procrastinate any longer. Drop me a line, and I can help you through the process. Contact me at brian@c21-advantage.com today.

Brian French of Century 21 Advantage blogs about short sales and foreclosures in Burlington Vermont. Oftentimes there is assistance when hardships occur.   A couple of examples of resources to use are www.hud.gov and for people trying to get some guidance they can try www.makinghomeaffordable.gov as well. Nationwide there are a number of people going through this process and it is good to have resources that can assist you in the process.  If you would like more information on short sale and foreclosures, drop Brian a line at brian@c21-advantage.com your real estate advantage.