The President signed the new bill (HR3548) into law today.
If an individual is under contract but will not close until July 1, 2010, they would be eligible for the tax credit (assuming they meet all other qualifications).They must have entered into the contract by May 1, 2010 and close before 7/1/2010.

For repeat buyers, there is a special rule for long time residents of the same principal residence. If an individual or their spouse has owned or used the same residence as such individual principal residence for any 5 consecutive year period during the 8 year period ending on the date of the purchase of a subsequent residence then such individual shall be treated as a first time homebuyer for purposes of this section with respect to the purchase of such subsequent residence. The timing outlined above would apply in terms of contract timing and closing.

Here is one example for repeat buyers.
12/31/2009 - Customer purchases a new principal residence.
12/31/2001-12/31/2009 – Customer owned a primary residence from 11/6/2003-11/6/2008
Customer can be treated as a first time home buyer for the 12/31/2009 purchase and would be eligible for tax credit (assuming they meet all other qualifications) of $6500 (joint) or $3250 (individual). No credit allowed for purchase price over $800,000. There are also income limitations.

How the home buyer tax credit would work:
· Tax credit: Ten percent of the purchase price of a primary residence, up to a maximum of $8,000 for first-time home buyers and $6,500 for repeat buyers who purchase between December 1, 2009 and May 1, 2010. First-time home-buyers are defined as people who have not owned a home in the previous three years. Repeat buyers must have owned their current home at least five years. The credit cannot be used for houses costing more than $800,000.

· Deadline for qualifying: Purchase agreements must be signed by April 30, 2010, and closings must be final by June 30.
· Military deadline: The deadline is extended by a year for members of the military who have served outside the U.S. for at least 90 days from Jan. 1, 2009, to May 1, 2010.

· Income limits: Individuals with annual incomes up to $125,000 and joint filers with incomes up to $225,000 qualify for the full credit. Individuals with incomes up to $145,000 and joint filers with incomes up to $245,000 qualify for reduced credits.

· How to apply: Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds their tax bill, the government will issue a payment. Taxpayers who want immediate refunds can amend their tax returns for 2008 to claim the credit.