This credit is available if you close on the purchase of a U.S. principal residence between April 9, 2008 and April 30, 2010. (If a home is under contract on April 30, the deadline to close is extended to June 30, 2010.) The maximum credit for 2008 purchases is the lesser of $7,500 or 10% of the home purchase price; the maximum credit for purchases in 2009 and 2010 is the lesser of $8,000 or 10% of the purchase price (the credit amount is halved for a buyer who uses married filing separate status). Maximum credits are allowed to individuals who did not own a U.S. principal residence within the three-year period ending on the purchase date. For purchases after November 6, 2009, a reduced credit equal to the lesser of $6,500 or 10% of the purchase price is allowed to an individual who owned the same U.S. principal residence for a period of five consecutive years during the eight-year period ending on the purchase date (the credit amount is halved for a buyer who uses married filing separate status). The credit is phased out at higher income levels (stricter phase-out ranges apply to purchases on or before November 6, 2009). For purchases after that date, the credit is only allowed if the price of the new principal residence doesn’t exceed $800,000. Credits for 2008 purchases generally must be paid back over 15 years, starting in 2010. Credits for 2009 and 2010 purchases generally won’t have to be paid back. Credits for 2009 purchases can be claimed on 2008 returns, and credits for 2010 purchases can be claimed on 2009 returns. The credit is fully refundable, which means it can be used to offset the buyer’s regular tax and alternative minimum tax liabilities with any leftover credit amount refunded to the buyer in cash. Certain liberalized rules apply to military service members.