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Many are scrambling to take advantage of the homebuyer tax credit before April 30. This credit, according to the IRS is called “The Worker, Homeownership and Business Assistance Act of 2009″ and was signed into law on Nov. 6, 2009.

Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.

Basically there are two types of tax credits, one for the first time homebuyer of up to $8,000 and the other for the ‘move-up’ homebuyer of up to $6,500.

The act was deemed to end November 7, 2009 but has been extended to homebuyers in hopes of stimulating the economy and helping those in need buy a new home.

So what are some of the basics of each credit. Here are some bullet points:

$8,000 First-time Home Buyer Tax Credit at a Glance

•    The $8,000 tax credit is for first-time homebuyers only. The IRS defines a first-time home buyer, according to the tax credit program,as someone who has not owned a principal residence during the three-year period prior to the purchase.
•    The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
•    The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
•    The tax credit applies only to homes priced at $800,000 or less.
•    The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
•    For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
•    For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

•    To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
•    The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
•    The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
•    The tax credit applies only to homes priced at $800,000 or less.
•    The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
•    Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
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What are some other rules or tips

1. Homeowners don’t have to sell their current or former principal residence to take the credit. The home can be rented out, occupied by friends or family members, or even left vacant. But they must enter into a binding contract to purchase a new home on or before April 30, 2010, and they must close that deal on or before June 30, 2010.

2. If you belong to the U.S. military personnel or are a U.S. Foreign Service employee and federal employee who works in intelligence agencies are given, you are given an extra year in which to buy a home and are exempt from the 36-month payback rule if they move out of the home due to a qualified official period of extended duty.

3. You must occupy your newly purchased home as a principal residence for at least 36 months. If you move out sooner than that, you will have to repay the entire tax credit to the federal government when you file you tax return for the year in which you vacate the home.

4. Home purchases from relatives of the taxpayer or the taxpayer’s spouse do not qualify for the tax credit. The IRS defines relatives as ancestors (parent, grandparent, etc.), lineal descendants (child, grandchildren, etc.) and spouses.

5. Married couples are not eligible to claim the first-time homebuyer tax credit if either spouse has previously owned a home. They may, however, qualify for the repeat homebuyer tax credit.

The rules are simple and there is still time to get out and purchase your next home and take advantage of a tax credit that can help you buy the home of your dreams.