Earlier this month, Congress extended and expanded the Home Buyer Tax Credit, doing two things. First, the First-Time Home Buyers who were eligible for up to an $ 8,000 credit can still qualify for one beyond the original expiration date of November 30; it is now extended thru April 30, 2010 (contract must be signed by that date, closing must be completed by June 30, 2010). There are still income-level phase-outs, but these have been raised. Second, current homeowners can get a tax credit of up to $ 6,500 if they go out and purchase another home (must be primary reisdence) between November 6, 2009 and April 30, 2010.

There are other limits, primarily that the home cannot cost more than $ 800,000. A number of loopholes that had been used by creative (or unscrupulous) taxpayers have been closed (sorry, your four year old cannot buy a home and qualify for the credit any longer).

If all these details and conditions sound confusing, it's because they are. This is typical of most tax credits, which are targeted. Compared to the Home Buyer Tax Credit, the Cash for Clunkers program earlier this yearwas pretty straight-forward.

So what to do? IF you qualify in 2009, you can take the credit on an amended 2008 return or a 2009 return, which allows you two opportunities to fit into the conditions and limitations; if you qualify in 2010, you can take it on the 2009 return or the 2010 return.

A side-note: as we've mentioned previously, the IRS is auditing more of these Home Buyer Tax Credit claims, by requiring copies of back-up documentation. We have begun including those copies with the tax return requesting the credit, to expedite the process at IRS and for our clients, which currently takes 16-20 weeks to get a taxpayer the money from the credit. The new law requires copy of the closing statement be attached, which indicates they are working to streamline the process.