Applying for the credit is simple. You simply need to claim the tax credit on your 2010 income tax return. No other special forms or papers need to be filed.

In particular, first-time homebuyers should complete IRS Form 5405 to determine their tax credit amount. Then, first-time homebuyers should claim that amount on Line 69 of their 1040 income tax return. No other applications or special forms are required. However, you will want to be sure that you qualify for the credit under the income limits and first-time homebuyer (please read previous page for income limits)

Note: You cannot claim the credit on Form 5405 for an intended purchase for some future date. You must actually have completed the purchase.

Further, states are assisting homebuyers in obtaining the tax credit. For example, some states are willing to help out first-time homebuyers by with loans specifically for the tax credit. Essentially, the state will lend the homebuyer a certain amount of money to make the purchase and receive the tax credit. Then, when the homebuyer receives the tax credit on his or her 2010 tax refund, the state will collect the tax credit back from the homebuyer in some type of repayment plan. These programs help first-time homebuyers get enough money to make the down payment and receive the tax credit.

As of the time of this writing, state tax credit loan programs that can help out include: Colorado, Delaware, Idaho, Kentucky, Missouri, New Jersey, Ohio, Pennsylvania and Tennessee.

Please refer to the National Council of State Housing Agencies’ website or your state for further updates and details.

Finally, on to the conclusion.