Tax credit to aid first-time homebuyers

WASHINGTON — First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.

Available for a limited time only, the credit applies to home purchases after April 8, 2008, and before July 1, 2009, and reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.

The credit is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

However, the credit operates much like an interest-f...