Homebuyers who are buying their first home between January 1, 2009 and December 31, 2009, or who haven't owned a home as their primary residence in the past three years, and who meet the income guidelines established for single or joint tax-filers can benefit from President Obama's federal 2009 First Time Homeowner Stimulus Package, qualifying for up to the full tax credit of $8,000 or 10% of the home's purchase price, whichever is less. You can benefit from this credit even if you own a vacation or rental property.

Here's how it works: This federal income tax credit is based on your Modified Adjusted Gross Income (MAGI) ? that is, your income after qualified tax deductions as calculated in your annual Federal tax return, after regular deductions. Married taxpayers qualify for the full $8,000 or 10% purchase tax credit if their modified adjusted gross income is $150,000 or less. Single taxpayers qualify for up to the full $8,000 or 10% purchase price tax credit if their modified adjusted gross income is $75,000 or less. Partial tax credits are available to those who are married with modified adjusted gross income between $150,000 - $170,000 ,and singles with a MAGI ranging between $75,000 - $95,000. Married but filing as individuals? Each spouse can qualify for $4000 or 5% of your home's purchase price, whichever is less. This credit can be accessed in one of two ways: You can save towards your down payment, by electing to reduce your payroll tax withholdings in an amount up to the credit you are eligible for; or, you can simply claim the amount you qualify for as a credit on your annual federal tax return. It is important to note hat if you reduce your payroll tax withholding amount, but then do not purchase/occupy a home within the eligible time period, you must repay the amount of the tax credit or your reduced tax withholdings to the IRS.

Those who purchased and have a title for a home that began construction in 2008 but did not obtain title until January 1, 2009 ? December 31, 2009, and will occupy their new home before December 31, 2009, may still qualify for this tax credit and be eligible to apply it to your 2008 taxes. The First Time Homeowner Stimulus tax credit amount is not linked to your local property tax amount? it is a separate federal program under President Obama's economic stimulus package.