First time homebuyer Credit 2011 is one of a very hot new changes that have been introduced in year 2011. If you qualify for this valuable credit, it can be a very big deal in saving you thousands of dollars in tax.

So, now the question arises that who is qualified to claim first-time home buyer credit in year 2011 tax returns. Well, here we go:

- To claim the credit, you have to serve on extended duty outside the United States for at least 90 days. Remember, this duty has to occur after December 31, 2008 and end before May 1, 2010.

-You have to purchase your home before May 1, 2011. If you enter into a binding agreement before May 1st and eventually purchase the property before July 1st, you

do qualify for the First Time Homebuyer Credit."

- If you build a house, its ok if you make commitment before May 1st 2011 and move in prior to July 1st. (oh! by the way check my article on how to select best tax preparation software for 2011)

- The First Time Homebuyer Credit puts another condition that the main home has to be in the United States. Partial credit is awarded if the house is a duplex or its a house with a detached building used for business purposes. Its okay if "House" is a houseboat, mobile home, cooperative apartment or condominium.

- The taxpayer can't make more than $125,000 or $245,000(married filing jointly). The deduction phases out at $145,000 or $245,000(married filing jointly).

- Another condition is that the home cannot cost more than $800,000.

- The taxpayer and the spouse both have to be first-time homebuyers. This means that you are not allowed to own a home for the three years before you buy this time.

- You are not eligible for first time homebuyer credit if you are:

      under 18 years of age,

      nonresident alien,

      dependent on someone's tax return,

      house is inheritance & is bought from a relative or  from business you own more than half.

Now, the question is what is the amount of Credit:

10% of purchase price of the home, but a maximum upto $8,000 when you file jointly.

So, go ahead & take advantage of the First Time Homebuyer Credit 2011. Remember, it requires you to get into a binding agreement on a house prior to May 1, 2011. All the best for a big refund!!