First-time home buyers scramble to beat deadline for $8,000 tax credit

First-time home buyers scramble to beat deadline for $8,000 tax credit

Ashley Johnson took a whirlwind tour of roughly 40 homes this summer.

The 26-year-old was staring down a deadline: Buy a home by the end of November in order to get $8,000 in free money from the federal government.

Who qualifies: First-time buyers and those who have not owned a home in three years. To claim the full amount, single buyers must have a modified adjusted gross income of $75,000 or less; for married buyers, that number is $150,000. Single buyers making more than $95,000 or married couples making more than $170,000 do not qualify.

How it works: A buyer purchases a home and then claims the credit on his federal income tax return. The credit offsets taxes the buyer might owe. If the buyer owes only $5,000 in taxes but is eligible for the full $8,000 credit, he gets a check for the difference — $3,000. Buyers can amend their 2008 tax returns or claim the credit on their 2009 returns.