The full $8,000 credit is available when the home buyer's modified adjusted gross income doesn't top $75,000, or doesn't top $150,000 for two married home buyers. At those levels, the credit begins phasing out over the next $20,000 of income. Home buyers can change their withholding at work to get the tax benefit right away, says CPA Kyle Vineyard, a tax partner at Eichstaedt & Devereaux LLP, a San Francisco accounting firm.
Alternatively, home buyers may amend their 2008 return to claim the credit (even though the house was bought in '09). This helps taxpayers whose credits are phasing out this year, says Vineyard. Amending last year's return allows the home buyer to use last year's income to calculate the phase-out.
Finally, that nemesis known as the alternative minimum tax has already been patched this year, thankfully. Washington-watchers predict that there will also be a patch (an increased exemption amount for the AMT) in 2010 as well. But after that, who knows the change?