If you're buying a home, the income tax credits Washington is offering this winter are a perk you can't afford to miss.

The Worker, Homeownership and Business Assistance Act of 2009 was approved in November and extended the first-time home buyer tax credit that was set to expire on Nov. 30.

It allows anyone who hasn't owned a home in the past three years to claim a credit of 10% of a home's purchase price, up to $8,000.

Sales contracts must be signed between Nov. 7, 2009, and April 30, 2010, and you must close on the purchase no later than July 1, 2010.

The act also allows buyers with higher incomes to take advantage of that credit.

Under the original law, individual buyers could earn no more than $75,000, or $150,000 for couples filing jointly, to qualify for the full $8,000 credit.

Now, buyers making up to $125,000, or $225,000 for couples, can do so.

The new act also includes a tax credit of up to $6,500 for individuals and families who have lived in their homes for at least five years and want to buy another home.

To take advantage of either tax credit, the home you are purchasing must be your principal residence and not cost more than $800,000.

These tax breaks are particularly valuable because they're credits, not deductions.

Deductions reduce your taxable income and lower the amount you owe in taxes by about 25 cents to 33 cents per dollar.

Tax credits are subtracted from the amount you owe the government. That means every tax credit dollar lowers your tax bill by a full dollar.

If the credit is more than the tax you owe, you'll be paid the difference.

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