A new law that went into effect Nov. 6 extends the first-time homebuyer credit five months and expands the eligibility requirements for purchasers.

The Worker, Homeownership, and Business Assistance Act of 2009 extends the deadline for qualifying home purchases from Nov. 30, 2009, to April 30, 2010. Additionally, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010, to settle on the purchase.

The maximum credit amount remains at $8,000 for a first-time homebuyer –– that is, a buyer who has not owned a primary residence during the three years up to the date of purchase.

But the new law also provides a “long-time resident” credit of up to $6,500 to others who do not qualify as “first-time homebuyers.” To qualify this way, a buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of a new home as a primary residence.

For all qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns.

It is very likely that the $8,000 tax credit for first time home buyers will be extended to April 30, 2010. And there will also be a credit of $6,500 for homebuyers who buy a new home.

To qualify for the these credits, you must have a sales contract dated by April 30, 2010 and must complete the transaction within 60 days.

This credit is available to taxpayers who file single tax returns with an income up to $125,000 and is available to taxpayers who file joint tax returns with an income up to $225,000.

The credit is not available for homes over $800,000.

If you are moving to a new home, you must have owned your current home for at least 5 years.

This new law will provide the IRS with a greater authority to oversee the returns and you must be 18 years old to qualify for the credit.

There are also special considerations to members of the  military, military intelligence and foreign service.  They are not subject to recapture fees and if they served overseas for more that 90 days in 2008 or 2009, their credit deadline is April 30, 2011.

Watch here for news of the bills actually passing through Congress.

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