The popular home buyer tax credit that was originally set to expire on November 30, 2009 will continue to be an incentive for prospective home buyers. This new measure was just signed by President Obama last Friday and offers an $8,000 tax credit for first-time home buyers that would be extended for up to seven months and expanded with a $6,500 tax credit for buyers who already own a home and have lived in their primary residences for at least five consecutive years.

This bill also increases the qualifying income limits to $125,000 for single tax filers (up from $75,000 previously) and $225,000 for joint filers (up from $125,000). The purchase price of the home is still capped at $800,000.

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 will not have to repay the credit as long as the home remains their primary residence for at least three years. This requirement is waived for active duty military personnel who are forced to move due to a military order.

Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30. Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.