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"The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the credit," according to Jeff Bell, president of the Silicon Valley Association of REALTORS® (SILVAR).

In November 2009, the federal tax credit was extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers would continue to be eligible for a tax credit of up to $8,000, while existing homeowners would be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increased the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions included in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. Home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase. This requirement is waived for active duty military personnel who move due to a military order.

"The first-time home buyer tax credit, along with near-historic highs in affordability and record lower interest rates, has given the housing market the lift it needed. There's no doubt the recent surge in home sales has given our economy a boost," Bell said.

SILVAR is asking its REALTOR® members to share the following information from the IRS with buyers who are eligible for the home buyer tax credit. With the release of Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and the related instructions, eligible home buyers can now start to file their 2009 tax return, Bell said. The IRS expects to start processing 2009 tax returns claiming the home buyer credit in mid-February.

In addition to filling out a Form 5405, all eligible home buyers must include with their 2009 tax returns one of the following documents in order to receive the credit:

Repeat buyers who are eligible for the tax credit must show they lived in their old homes for a five consecutive year period during the eight-year period ending on the purchase date of the new home. They are asked to attach the following documentation covering the five consecutive year period:

Taxpayers claiming the home buyer credit must file a paper tax return because of the additional documentation requirements. For more details on IRS Form 5405 and claiming the home buyer tax credit, visit www.irs.gov.