A new version of the economic recovery plan is likely to pass the Senate with a handful of Republican votes. But a final bill is still a ways off. If the Senate passes the bill, leaders will need to then negotiate the final bill with the House, which passed a different version two weeks ago. Senate Democrats can’t pass a stimulus package without at least a few Republicans signing on. In order to pass through the House, they need more Republican votes which it is currently lacking.

Current Tax Credit - $7,500, repayment, first time buyers only, income limits
Proposed Tax Credit - $15,000, no repayment, no first time buyer restriction, no income limits

5 Things to Know

1. I recently bought a home and qualified for the $7,500 new home buyer tax credit. Should this provision become law, would I qualify for it as well?  No, because the effective date is the date the amendment is enacted.
2. What are the odds of this provision becoming a law? The $15,000 home-buying provision is one component of the economic stimulus package, the size of the package–which now totals more than $900 billion–has prompted some Republic Senators to try and slash provisions to lower the tab. Delay in negotiations will delay the approval.
3. Does this tax credit need to be paid back? Nope. That’s a key distinction from the $7,500 first-time home buyer credit, which was actually a 15-year repayment, which translates into a no-interest loan.
4. Is there an income limit or any other restrictions on participation? The tax credit would be limited to primary residences and does not come with an income restriction. You must occupy the property for at least two years as your primary residence.
5. Can I take the credit during tax year 2008? Yes, even if you buy a home in 2009, the provision would enable you “to file your taxes as if you purchased your home on December 31 of 2008.