There have been a lot of questions about the tax credit for repeat home buyers since it was signed into law on Nov. 6, but the IRS had released no clear guidance for it.

Until just recently, that is. To take advantage of either the $6,500 tax credit for existing home owners or the $8,000 tax credit for first-time home buyers, you need a copy of IRS Form 5405. The IRS has issued guidance for the $8,000 credit, but didn’t really have much for the $6,500 one until Jan. 16.

You can either get Form 5405 by visiting the IRS on the Internet at irs.gov and running a search for it or by simply looking at this blog post. Make sure to grab both the form and the instructions for it.

Both credits are rather similar with a few exceptions. A first-time home buyer is defined as one that hasn’t owned a home in the three years prior to the purchase of the one for which the credit is claimed.

To be eligible for that credit, the home buyer must have entered into a contract to purchase the home after Nov. 2008 and before May 1 and must close on it prior to July 1. The $8,000 credit is the maximum that can be claimed – eligible buyers will actually claim 10 percent of the purchase price of the home or $8,000, whichever amount is less.

The requirements for existing home owners are different. An existing home owner (confusingly called a “long-time resident of the same main home” by the IRS) is defined as someone who has owned the same house for five consecutive years of the past eight. While first-time buyers can claim a credit for purchases going back to Nov. 2008 (if they haven’t claimed the credit already, of course), existing home owners can only claim the credit for houses under contract after Nov. 6, 2009 and before May 1 and closing prior to July 1.

The $6,500 credit is the maximum that can be claimed by existing home owners. Again, the IRS allows either 10 percent of the purchase price of the home or $6,500, whichever amount is lower.

So, that’s where the credits are different. Both credits are identical when it comes to defining which homes are ineligible and salary guidelines. People wanting to claim the credit on homes costing more than $800,000 and purchased after Nov. 6 are out of luck.

Similarly, individuals making $145,000 per year or more and couple making $245,000 or more cannot claim the credit if they purchased a home after Nov. 6. Prior to that date, individuals making $95,000 or more and couples making $170,000 or more are ineligible.

People who are in the military, Foreign Service or members of the U.S. intelligence committee who are on duty outside of the country may have an additional year to claim the credit.

It’s worth mentioning that the IRS had to deal with a lot of fraud last year in that some people were claiming a tax credit without having purchased a home. This time around, the IRS wants a copy of a settlement statement submitted along with Form 5405 as proof that a house has been purchased.

In most cases, that HUD-1 statement is proof enough for the IRS.

So, there’s some guidance from the IRS. The ARA reminds all potential buyers that anyone wanting to take advantage of either credit must have a home under contract prior to May 1 and the transaction must close prior to July 1. In other words, there’s not a lot of time left to find that ideal home, get it under contract and buy it before the credit is gone.

House to House is written by ARA Director of Media Relations Ethan C. Nobles and is distributed weekly to publications in the Natural State by the Arkansas Realtors® Association.