According to the new plan, first-time home buyers who buy a home this year will be eligible to receive an $8,000 tax credit -- if they meet a battery of qualifications.
"For first-time home buyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit," said IRS Commissioner Doug Shulman, in a news release. "This important change gives qualifying home buyers cash they do not have to pay back."
The tax credit is different from the $7,500 tax credit already available to some home owners under last year's Housing and Economic Recovery Act.
"The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous 'credit' was essentially an interest-free loan," according to the plan's Web site.
Under the previous plan, the $7,500 tax credit was a 15-year interest-free loan and was available to home buyers who purchased their homes after April 9, 2008, and before July 1, 2009.
The new tax credit offers a larger tax credit, but it also sports a laundry list of fine print-like restrictions, from the date of purchase to the buyer's income.
The buyer must be a first-time home buyer.
The plan defines a "first-time home buyer" as "buyer who has not owned a principal residence during the three-year period prior to the purchase."
The house must be bought between Jan. 1, 2009 and Dec. 1, 2009.
For anyone who purchased a home before the New Year, too bad. The tax credit only counts if the home is bought after Jan. 1. Also, the home cannot be purchased after Dec. 1 -- meaning there are 30 days at the end of this year during which time anyone buying a home would not be eligible for the credit.
To Michelle Singletary, personal finance columnist for The Washington Post, that unusual timing is "idiotic."
"I know there will be people who will read Dec. 1 as the end of the year, Dec. 31 -- and those who make that mistake may be in for a nasty surprise," she wrote in a Feb. 22 column. "You would naturally think the cutoff would be the end of the year."
The buyer's modified adjusted gross income (MAGI) is less than $95,000 for an individual or $170,000 for a married couple filing a joint return.
Up to a modified adjusted gross income of $75,000 for individuals and $150,000 for joint filers, home buyers are eligible for the maximum tax credit. As income rises from there, however, the amount of available credit declines until the buyer's MAGI reaches $95,000, at which point the buyer is no longer eligible for credit.
The house you purchase must be your "main" home.
For any multiple home owners or potential multiple home owners out there, the new tax credit will not count toward non-primary homes.
"Main" home is defined by the plan as "any home that will be used as principle residence," and includes "single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats."