The American Recovery and Reinvestment Act of 2009 expanded the First-Time Homebuyers Credit  in two significant ways for qualifying taxpayers who buy a home in 2009 before December 1. The credit no longer has to be repaid, and the maximum has been increased to $8,000, or $4,000 for married filing separately. Qualifying taxpayers can claim the credit either on their 2008 or 2009 tax returns.

Form 5405, First-Time Homebuyer Credit, provides additional information on who can and cannot claim the credit, income limitations and repayment of the credit.

For taxpayers who purchased a home after April 8, 2008, and before Jan. 1, 2009, the old credit maximums still apply: $7,500, or $3,750 for individual filers. The credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.