A new $7,500 temporary first-time home buyer tax credit is expected to help millions of Americans.

The tax credit is available for first-time home buyers, which includes people who have not owned a home that is their primary residence for at least three years.

The credit depends on how much money the home buyer makes. To receive the full tax credit amount of $7,500, the income limits are $75,000 a year for single taxpayers and $150,000 for married taxpayers filing joint returns. For partial credit the upper limit is $95,000 and $170,000 respectively.

The home purchase must occur on or after April 9, 2008 and before July 1, 2009.

Qualified home buyers claim the credit when they file their income tax return. The credit is refundable, which means if their tax liability is less than the credit, they will get a check from the IRS for the difference.

The tax credit works as an interest free loan with up to 15 years to pay it back. For example, a home buyer claiming the full $7,500 credit would repay the loan at a rate of about $500 a year.

Wishing you many happy returns,

Dr. Wayne T. Essex