What_DDQ 's_VBZ New_JJ for_IF 2010_MC This_DD1 section_NN1 summarizes_VVZ important_JJ tax_NN1 changes_NN2 that_CST took_VVD effect_NN1 in_II 2009_MC ._. 
Most_DAT of_IO these_DD2 changes_NN2 are_VBR discussed_VVN in_II more_DAR detail_NN1 throughout_II this_DD1 publication_NN1 ._. 
Changes_NN2 are_VBR also_RR discussed_VVN at_II www._NNU irs.gov_NNU ,_, click_VV0 on_II Forms_NN2 and_CC Publications_NN2 ,_, and_CC then_RT on_II What_DDQ 's_VBZ Hot_JJ in_II forms_NN2 and_CC publications_NN2 ._. 
Economic_JJ recovery_NN1 payment_NN1 ._. 
Any_DD economic_JJ recovery_NN1 payment_NN1 you_PPY received_VVN is_VBZ not_XX taxable_JJ for_IF federal_JJ income_NN1 tax_NN1 purposes_NN2 ,_, but_CCB it_PPH1 reduces_VVZ any_DD making_NN1 work_NN1 pay_NN1 credit_NN1 or_CC government_NN1 retiree_NN1 credit_NN1 ._. 
Making_VVG work_NN1 pay_NN1 credit_NN1 ._. 
If_CS you_PPY have_VH0 earned_VVN income_NN1 from_II work_NN1 ,_, you_PPY may_VM be_VBI able_JK to_TO take_VVI this_DD1 credit_NN1 ._. 
It_PPH1 is_VBZ 6.2%_FO of_IO your_APPGE earned_JJ income_NN1 but_CCB can_VM not_XX be_VBI more_DAR than_CSN $400_NNU (_( $800_NNU if_CS married_JJ filing_NN1 jointly_RR )_) ._. 
Government_NN1 retiree_NN1 credit_NN1 ._. 
You_PPY may_VM be_VBI able_JK to_TO take_VVI this_DD1 credit_NN1 if_CS you_PPY get_VV0 a_AT1 government_NN1 pension_NN1 or_CC annuity_NN1 ,_, but_CCB it_PPH1 reduces_VVZ any_DD making_NN1 work_NN1 pay_NN1 credit_NN1 ._. 
U.S._NP1 Savings_NN2 Bonds_NN2 ._. 
You_PPY can_VM now_RT use_VVI your_APPGE refund_NN1 to_TO buy_VVI up_RG21 to_RG22 $5,000_NNU in_II U.S._NP1 Series_NN I_ZZ1 savings_NN2 bonds_NN2 in_II multiples_NN2 of_IO $50_NNU ._. 
Cash_NN1 for_IF clunkers_NN2 ._. 
A_ZZ1 $3,500_NNU or_CC $4,500_NNU voucher_NN1 or_CC payment_NN1 made_VVN for_IF such_DA a_AT1 voucher_NN1 under_II the_AT CARS_NN2 "_" cash_VV0 for_IF clunkers_NN2 "_" program_VV0 to_TO buy_VVI or_CC lease_VVI a_AT1 new_JJ fuel-efficient_JJ automobile_NN1 is_VBZ not_XX taxable_JJ for_IF federal_JJ income_NN1 tax_NN1 purposes_NN2 ._. 
Unemployment_NN1 compensation_NN1 ._. 
You_PPY do_VD0 not_XX have_VHI to_TO pay_VVI tax_NN1 on_II unemployment_NN1 compensation_NN1 up_RG21 to_RG22 $2,400_NNU per_II person_NN1 for_IF the_AT year_NNT1 ._. 
Amounts_NN2 over_RG $2,400_NNU are_VBR still_RR taxable_JJ ._. 
American_JJ opportunity_NN1 education_NN1 credit_NN1 ._. 
The_AT maximum_JJ Hope_NN1 education_NN1 credit_NN1 is_VBZ increased_VVN to_II $2,500_NNU ._. 
The_AT increased_JJ credit_NN1 has_VHZ been_VBN renamed_VVN the_AT American_JJ opportunity_NN1 credit_NN1 and_CC part_NN1 of_IO it_PPH1 is_VBZ refundable_JJ ._. 
Deduction_NN1 for_IF motor_NN1 vehicle_NN1 taxes_NN2 ._. 
If_CS you_PPY bought_VVD a_AT1 new_JJ motor_NN1 vehicle_NN1 in_II 2009_MC after_II February_NPM1 16_MC ,_, you_PPY may_VM be_VBI able_JK to_TO deduct_VVI any_DD state_NN1 or_CC local_JJ sales_NN or_CC excise_NN1 taxes_NN2 on_II the_AT purchase_NN1 ._. 
In_II states_NN2 without_IW a_AT1 sales_NN tax_NN1 ,_, you_PPY may_VM be_VBI able_JK to_TO deduct_VVI certain_JJ other_JJ taxes_NN2 or_CC fees_NN2 instead_RR ._. 
Take_VV0 the_AT deduction_NN1 on_II Schedule_NN1 A_ZZ1 (_( Form_VV0 1040_MC )_) if_CS you_PPY are_VBR itemizing_VVG deductions_NN2 and_CC are_VBR not_XX electing_VVG to_TO deduct_VVI state_NN1 and_CC local_JJ general_JJ sales_NN taxes_NN2 ._. 
If_CS you_PPY are_VBR not_XX itemizing_VVG deductions_NN2 ,_, these_DD2 taxes_NN2 increase_VV0 your_APPGE standard_JJ deduction_NN1 as_CSA figured_VVN on_II Schedule_NN1 L_ZZ1 (_( Form_VV0 1040A_FO or_CC 1040_MC )_) ._. 
Qualifying_JJ child_NN1 definition_NN1 revised_VVD ._. 
The_AT following_JJ changes_NN2 to_II the_AT definition_NN1 of_IO a_AT1 qualifying_JJ child_NN1 apply_VV0 ._. 
Your_APPGE qualifying_JJ child_NN1 must_VM be_VBI younger_JJR than_CSN you_PPY unless_CS the_AT child_NN1 is_VBZ permanently_RR and_CC totally_RR disabled_JJ ._. 
A_AT1 child_NN1 can_VM not_XX be_VBI your_APPGE qualifying_JJ child_NN1 if_CS he_PPHS1 or_CC she_PPHS1 files_VVZ a_AT1 joint_JJ return_NN1 ,_, unless_CS the_AT return_NN1 was_VBDZ filed_VVN only_RR as_II a_AT1 claim_NN1 for_IF refund_NN1 ._. 
If_CS the_AT parents_NN2 of_IO a_AT1 child_NN1 can_VM claim_VVI the_AT child_NN1 as_II a_AT1 qualifying_JJ child_NN1 but_CCB no_AT parent_NN1 so_RR claims_VVZ the_AT child_NN1 ,_, no_PN121 one_PN122 else_RR can_VM claim_VVI the_AT child_NN1 as_II a_AT1 qualifying_JJ child_NN1 unless_CS that_DD1 person_NN1 's_VBZ adjusted_VVN gross_JJ income_NN1 (_( AGI_NP1 )_) is_VBZ higher_JJR than_CSN the_AT highest_JJT AGI_NN1 of_IO any_DD parent_NN1 of_IO the_AT child_NN1 who_PNQS can_VM claim_VVI the_AT child_NN1 ._. 
Your_APPGE child_NN1 is_VBZ a_AT1 qualifying_JJ child_NN1 for_IF purposes_NN2 of_IO the_AT child_NN1 tax_NN1 credit_NN1 only_RR if_CS you_PPY can_VM and_CC do_VD0 claim_VVI an_AT1 exemption_NN1 for_IF him_PPHO1 or_CC her_PPHO1 ._. 
Earned_JJ income_NN1 credit_NN1 (_( EIC_NP1 )_) ._. 
The_AT EIC_NN1 has_VHZ increased_VVN for_IF people_NN with_IW three_MC or_CC more_DAR children_NN2 and_CC for_IF some_DD married_JJ couples_NN2 filing_VVG jointly_RR ._. 
You_PPY may_VM be_VBI able_JK to_TO take_VVI the_AT EIC_NN1 if_CS :_: Three_MC or_CC more_DAR children_NN2 lived_VVN with_IW you_PPY and_CC you_PPY earned_VVD less_DAR than_CSN $43,279_NNU (_( $48,279_NNU if_CS married_JJ filing_NN1 jointly_RR )_) ,_, Two_MC children_NN2 lived_VVN with_IW you_PPY and_CC you_PPY earned_VVD less_DAR than_CSN $40,295_NNU (_( $45,295_NNU if_CS married_JJ filing_NN1 jointly_RR )_) ,_, One_MC1 child_NN1 lived_VVN with_IW you_PPY and_CC you_PPY earned_VVD less_DAR than_CSN $35,463_NNU (_( $40,463_NNU if_CS married_JJ filing_NN1 jointly_RR )_) ,_, or_CC A_ZZ1 child_NN1 did_VDD not_XX live_VVI with_IW you_PPY and_CC you_PPY earned_VVD less_DAR than_CSN $13,440_NNU (_( $18,440_NNU if_CS married_JJ filing_NN1 jointly_RR )_) ._. 
The_AT maximum_JJ AGI_NN1 you_PPY can_VM have_VHI and_CC still_RR get_VV0 the_AT credit_NN1 also_RR has_VHZ increased_VVN ._. 
You_PPY may_VM be_VBI able_JK to_TO take_VVI the_AT credit_NN1 if_CS your_APPGE AGI_NN1 is_VBZ less_DAR than_CSN the_AT amount_NN1 in_II the_AT above_JJ list_NN1 that_CST applies_VVZ to_II you_PPY ._. 
The_AT maximum_JJ investment_NN1 income_NN1 you_PPY can_VM have_VHI and_CC still_RR get_VV0 the_AT credit_NN1 has_VHZ increased_VVN to_II $3,100_NNU ._. 
Divorced_JJ or_CC separated_JJ parents_NN2 ._. 
A_AT1 noncustodial_JJ parent_NN1 claiming_VVG an_AT1 exemption_NN1 for_IF a_AT1 child_NN1 can_VM no_RR21 longer_RR22 attach_VVI certain_JJ pages_NN2 from_II a_AT1 divorce_NN1 decree_NN1 or_CC separation_NN1 agreement_NN1 instead_II21 of_II22 Form_NN1 8332_MC if_CS the_AT decree_NN1 or_CC agreement_NN1 went_VVD into_II effect_NN1 after_II 2008_MC ._. 
The_AT noncustodial_JJ parent_NN1 must_VM attach_VVI Form_NN1 8332_MC or_CC a_AT1 similar_JJ statement_NN1 signed_VVN by_II the_AT custodial_JJ parent_NN1 and_CC whose_DDQGE only_JJ purpose_NN1 is_VBZ to_TO release_VVI a_AT1 claim_NN1 to_II exemption_NN1 ._. 
Tax_NN1 on_II child_NN1 's_GE investment_NN1 income_NN1 ._. 
The_AT amount_NN1 of_IO taxable_JJ investment_NN1 income_NN1 a_AT1 child_NN1 can_VM have_VHI without_IW it_PPH1 being_VBG subject_II21 to_II22 tax_NN1 at_II the_AT parent_NN1 's_GE rate_NN1 has_VHZ increased_VVN to_II $1,900_NNU ._. 
Personal_JJ casualty_NN1 and_CC theft_NN1 loss_NN1 limit_NN1 ._. 
Generally_RR ,_, a_AT1 personal_JJ casualty_NN1 or_CC theft_NN1 loss_NN1 must_VM be_VBI more_DAR than_CSN $500_NNU to_TO be_VBI allowed_VVN ._. 
This_DD1 is_VBZ in_II31 addition_II32 to_II33 the_AT 10%_NNU of_IO AGI_NN2 limit_VV0 that_CST generally_RR applies_VVZ to_II the_AT net_JJ loss_NN1 ._. 
Excluding_II the_AT Gain_NN1 You_PPY may_VM qualify_VVI to_TO exclude_VVI from_II your_APPGE income_NN1 all_DB or_CC part_NN1 of_IO any_DD gain_NN1 from_II the_AT sale_NN1 of_IO your_APPGE main_JJ home_NN1 ._. 
This_DD1 means_VVZ that_CST ,_, if_CS you_PPY qualify_VV0 ,_, you_PPY will_VM not_XX have_VHI to_TO pay_VVI tax_NN1 on_II the_AT gain_NN1 up_II21 to_II22 the_AT limit_NN1 described_VVN under_II Maximum_JJ Exclusion_NN1 ,_, next_MD ._. 
To_TO qualify_VVI ,_, you_PPY must_VM meet_VVI the_AT ownership_NN1 and_CC use_VVI tests_NN2 described_VVN later_RRR ._. 
You_PPY can_VM choose_VVI not_XX to_TO take_VVI the_AT exclusion_NN1 by_II including_VVG the_AT gain_NN1 from_II the_AT sale_NN1 in_II your_APPGE gross_JJ income_NN1 on_II your_APPGE tax_NN1 return_NN1 for_IF the_AT year_NNT1 of_IO the_AT sale_NN1 ._. 
This_DD1 choice_NN1 can_VM be_VBI made_VVN (_( or_CC revoked_VVD )_) at_II any_DD time_NNT1 before_II the_AT expiration_NN1 of_IO a_AT1 3-year_JJ period_NN1 beginning_VVG on_II the_AT due_JJ date_NN1 of_IO your_APPGE return_NN1 (_( not_XX including_II extensions_NN2 )_) for_IF the_AT year_NNT1 of_IO the_AT sale_NN1 ._. 
You_PPY can_VM use_VVI Worksheet_NN1 2_MC (_( near_II the_AT end_NN1 of_IO this_DD1 publication_NN1 )_) to_TO figure_VVI the_AT amount_NN1 of_IO your_APPGE exclusion_NN1 and_CC your_APPGE taxable_JJ gain_NN1 ,_, if_CS any_DD ._. 
If_CS you_PPY have_VH0 any_DD taxable_JJ gain_NN1 from_II the_AT sale_NN1 of_IO your_APPGE home_NN1 ,_, you_PPY may_VM have_VHI to_TO increase_VVI your_APPGE withholding_NN1 or_CC make_VV0 estimated_JJ tax_NN1 payments_NN2 ._. 
Maximum_JJ Exclusion_NN1 You_PPY can_VM exclude_VVI up_RG21 to_RG22 $250,000_NNU of_IO the_AT gain_NN1 on_II the_AT sale_NN1 of_IO your_APPGE main_JJ home_NN1 if_CS all_DB of_IO the_AT following_JJ are_VBR true_JJ ._. 
You_PPY meet_VV0 the_AT ownership_NN1 test_NN1 ._. 
You_PPY meet_VV0 the_AT use_NN1 test_NN1 ._. 
During_II the_AT 2-year_JJ period_NN1 ending_VVG on_II the_AT date_NN1 of_IO the_AT sale_NN1 ,_, you_PPY did_VDD not_XX exclude_VVI gain_NN1 from_II the_AT sale_NN1 of_IO another_DD1 home_NN1 ._. 
If_CS you_PPY and_CC another_DD1 person_NN1 owned_VVD the_AT home_NN1 jointly_RR but_CCB file_VV0 separate_JJ returns_NN2 ,_, each_DD1 of_IO you_PPY can_VM exclude_VVI up_RG21 to_RG22 $250,000_NNU of_IO gain_NN1 from_II the_AT sale_NN1 of_IO your_APPGE interest_NN1 in_II the_AT home_NN1 if_CS each_DD1 of_IO you_PPY meets_VVZ the_AT three_MC conditions_NN2 just_RR listed_VVN ._. 
You_PPY may_VM be_VBI able_JK to_TO exclude_VVI up_RG21 to_RG22 $500,000_NNU of_IO the_AT gain_NN1 on_II the_AT sale_NN1 of_IO your_APPGE main_JJ home_NN1 if_CS you_PPY are_VBR married_JJ and_CC file_VV0 a_AT1 joint_JJ return_NN1 and_CC meet_VV0 the_AT requirements_NN2 listed_VVN in_II the_AT discussion_NN1 of_IO the_AT special_JJ rules_NN2 for_IF joint_JJ returns_NN2 ,_, later_RRR ,_, under_II Married_JJ Persons_NN2 ._. 
Exception_NN1 ._. 
If_CS you_PPY owned_VVD and_CC lived_VVD in_II the_AT property_NN1 as_CSA your_APPGE main_JJ home_NN1 for_IF less_DAR than_CSN 2_MC years_NNT2 ,_, you_PPY can_VM still_RR claim_VVI an_AT1 exclusion_NN1 in_II some_DD cases_NN2 ._. 
However_RR ,_, the_AT maximum_JJ amount_NN1 you_PPY may_VM be_VBI able_JK to_TO exclude_VVI will_VM be_VBI reduced_VVN ._. 
Period_NN1 of_IO Ownership_NN1 and_CC Use_VV0 The_AT required_JJ 2_MC years_NNT2 of_IO ownership_NN1 and_CC use_VV0 during_II the_AT 5-year_JJ period_NN1 ending_VVG on_II the_AT date_NN1 of_IO the_AT sale_NN1 do_VD0 not_XX have_VHI to_TO be_VBI continuous_JJ nor_CC do_VD0 they_PPHS2 have_VHI to_TO occur_VVI at_II the_AT same_DA time_NNT1 ._. 
You_PPY meet_VV0 the_AT tests_NN2 if_CS you_PPY can_VM show_VVI that_CST you_PPY owned_VVD and_CC lived_VVD in_II the_AT property_NN1 as_CSA your_APPGE main_JJ home_NN1 for_IF either_RR 24_MC full_JJ months_NNT2 or_CC 730_MC days_NNT2 (_( 365_MC &times;_II 2_MC )_) during_II the_AT 5-year_JJ period_NN1 ending_VVG on_II the_AT date_NN1 of_IO sale_NN1 ._. 
Temporary_JJ absence_NN1 ._. 
Short_JJ temporary_JJ absences_NN2 for_IF vacations_NN2 or_CC other_JJ seasonal_JJ absences_NN2 ,_, even_CS21 if_CS22 you_PPY rent_VV0 out_RP the_AT property_NN1 during_II the_AT absences_NN2 ,_, are_VBR counted_VVN as_CSA periods_NN2 of_IO use_NN1 ._. 
The_AT following_JJ examples_NN2 assume_VV0 that_CST the_AT reduced_JJ maximum_JJ exclusion_NN1 (_( discussed_VVN later_RRR )_) does_VDZ not_XX apply_VVI to_II the_AT sales_NN ._. 
Ownership_NN1 and_CC use_VV0 tests_NN2 met_VVN at_II different_JJ times_NNT2 ._. 
You_PPY can_VM meet_VVI the_AT ownership_NN1 and_CC use_VVI tests_NN2 during_II different_JJ 2-year_JJ periods_NN2 ._. 
However_RR ,_, you_PPY must_VM meet_VVI both_DB2 tests_NN2 during_II the_AT 5-year_JJ period_NN1 ending_VVG on_II the_AT date_NN1 of_IO the_AT sale_NN1 ._. 
You_PPY generally_RR can_VM choose_VVI to_TO take_VVI income_NN1 taxes_NN2 you_PPY paid_VVD or_CC accrued_VVN during_II the_AT year_NNT1 to_II a_AT1 foreign_JJ country_NN1 or_CC U.S._NP1 possession_NN1 as_II a_AT1 credit_NN1 against_II your_APPGE U.S._NP1 income_NN1 tax_NN1 ._. 
Or_CC ,_, you_PPY can_VM deduct_VVI them_PPHO2 as_II an_AT1 itemized_JJ deduction_NN1 You_PPY can_VM not_XX take_VVI a_AT1 credit_NN1 (_( or_CC deduction_NN1 )_) for_IF foreign_JJ income_NN1 taxes_NN2 paid_VVN on_II income_NN1 that_CST you_PPY exclude_VV0 from_II U.S._NP1 tax_NN1 under_II any_DD of_IO the_AT following_JJ ._. 
Foreign_JJ earned_JJ income_NN1 exclusion_NN1 ._. 
Foreign_JJ housing_NN1 exclusion_NN1 ._. 
Income_NN1 from_II Puerto_NP1 Rico_NP1 exempt_VV0 from_II U.S._NP1 tax_NN1 ._. 
Possession_NN1 exclusion_NN1 ._. 
Limit_VV0 on_II the_AT credit_NN1 ._. 
Unless_CS you_PPY can_VM elect_VVI not_XX to_TO file_VVI Form_NN1 1116_MC ,_, your_APPGE foreign_JJ tax_NN1 credit_NN1 can_VM not_XX be_VBI more_DAR than_CSN your_APPGE U.S._NP1 tax_NN1 liability_NN1 (_( Form_VV0 1040_MC ,_, line_NN1 44_MC )_) ,_, multiplied_VVN by_II a_AT1 fraction_NN1 ._. 
The_AT numerator_NN1 of_IO the_AT fraction_NN1 is_VBZ your_APPGE taxable_JJ income_NN1 from_II sources_NN2 outside_II the_AT United_NP1 States_NP1 ._. 
The_AT denominator_NN1 is_VBZ your_APPGE total_JJ taxable_JJ income_NN1 from_II U.S._NP1 and_CC foreign_JJ sources_NN2 ._. 
How_RRQ to_TO take_VVI the_AT credit_NN1 ._. 
Complete_JJ Form_NN1 1116_MC and_CC attach_VV0 it_PPH1 to_II your_APPGE Form_NN1 1040_MC ._. 
Enter_VV0 the_AT credit_NN1 on_II Form_NN1 1040_MC ,_, line_NN1 47_MC ._. 
Exception_NN1 ._. 
You_PPY do_VD0 not_XX have_VHI to_TO complete_VVI Form_NN1 1116_MC to_TO take_VVI the_AT credit_NN1 if_CS all_DB of_IO the_AT following_JJ apply_VV0 ._. 
All_DB of_IO your_APPGE foreign_JJ source_NN1 gross_JJ income_NN1 was_VBDZ passive_JJ income_NN1 ,_, which_DDQ generally_RR includes_VVZ interest_NN1 and_CC dividends_NN2 ._. 
All_DB of_IO your_APPGE foreign_JJ source_NN1 gross_JJ income_NN1 and_CC the_AT foreign_JJ tax_NN1 paid_VVN on_II it_PPH1 were_VBDR reported_VVN to_II you_PPY on_II a_AT1 qualified_JJ payee_NN1 statement_NN1 ,_, which_DDQ includes_VVZ Form_NN1 1099-INT_JJ and_CC Form_VV0 1099-DIV_NN1 ._. 
The_AT total_NN1 of_IO your_APPGE creditable_JJ foreign_JJ taxes_NN2 was_VBDZ not_XX more_DAR than_CSN $300_NNU (_( $600_NNU if_CS married_JJ filing_NN1 jointly_RR )_) ._. 
You_PPY elect_VV0 this_DD1 procedure_NN1 for_IF the_AT tax_NN1 year_NNT1 ._. 
Mortgage_NN1 Interest_NN1 Credit_NN1 The_AT mortgage_NN1 interest_NN1 credit_NN1 is_VBZ intended_VVN to_TO help_VVI lower-income_JJ individuals_NN2 own_VV0 a_AT1 home_NN1 ._. 
If_CS you_PPY qualify_VV0 ,_, you_PPY can_VM take_VVI the_AT credit_NN1 each_DD1 year_NNT1 for_IF part_NN1 of_IO the_AT home_NN1 mortgage_NN1 interest_NN1 you_PPY pay_VV0 ._. 
Who_PNQS qualifies_VVZ ._. 
You_PPY may_VM be_VBI eligible_JJ for_IF the_AT credit_NN1 if_CS you_PPY were_VBDR issued_VVN a_AT1 qualified_JJ mortgage_NN1 credit_NN1 certificate_NN1 (_( MCC_NP1 )_) from_II your_APPGE state_NN1 or_CC local_JJ government_NN1 ._. 
Generally_RR ,_, an_AT1 MCC_NP1 is_VBZ issued_VVN only_RR in_II connection_NN1 with_IW a_AT1 new_JJ mortgage_NN1 for_IF the_AT purchase_NN1 of_IO your_APPGE main_JJ home_NN1 ._. 
Amount_NN1 of_IO credit_NN1 ._. 
Figure_VV0 your_APPGE credit_NN1 on_II Form_NN1 8396_MC ._. 
If_CS your_APPGE mortgage_NN1 loan_NN1 amount_NN1 is_VBZ equal_JJ to_II (_( or_CC smaller_JJR than_CSN )_) the_AT certified_JJ indebtedness_NN1 (_( loan_NN1 )_) amount_NN1 shown_VVN on_II your_APPGE MCC_NP1 ,_, enter_VV0 on_II Form_NN1 8396_MC ,_, line_NN1 1_MC1 ,_, all_DB the_AT interest_NN1 you_PPY paid_VVD on_II your_APPGE mortgage_NN1 during_II the_AT year_NNT1 ._. 
If_CS your_APPGE mortgage_NN1 loan_NN1 amount_NN1 is_VBZ larger_JJR than_CSN the_AT certified_JJ indebtedness_NN1 amount_NN1 shown_VVN on_II your_APPGE MCC_NP1 ,_, you_PPY can_VM figure_VVI the_AT credit_NN1 on_II only_JJ part_NN1 of_IO the_AT interest_NN1 you_PPY paid_VVD ._. 
To_TO find_VVI the_AT amount_NN1 to_TO enter_VVI on_II line_NN1 1_MC1 ,_, multiply_VV0 the_AT total_JJ interest_NN1 you_PPY paid_VVD during_II the_AT year_NNT1 on_II your_APPGE mortgage_NN1 by_II the_AT following_JJ fraction_NN1 ._. 
Certified_JJ indebtedness_NN1 amount_NN1 on_II your_APPGE MCC_NP1 Original_JJ amount_NN1 of_IO your_APPGE mortgage_NN1 Limit_NN1 based_VVN on_II credit_NN1 rate_NN1 ._. 
If_CS the_AT certificate_NN1 credit_NN1 rate_NN1 is_VBZ more_DAR than_CSN 20%_NNU ,_, the_AT credit_NN1 you_PPY are_VBR allowed_VVN can_VM not_XX be_VBI more_DAR than_CSN $2,000_NNU ._. 
If_CS two_MC or_CC more_DAR persons_NN2 (_( other_II21 than_II22 a_AT1 married_JJ couple_NN1 filing_VVG a_AT1 joint_JJ return_NN1 )_) hold_VV0 an_AT1 interest_NN1 in_II the_AT home_NN1 to_II which_DDQ the_AT MCC_NP1 relates_VVZ ,_, this_DD1 $2,000_NNU limit_NN1 must_VM be_VBI divided_VVN based_VVN on_II the_AT interest_NN1 held_VVN by_II each_DD1 person_NN1 ._. 
See_VV0 Publication_NN1 530_MC for_IF more_DAR information_NN1 ._. 
Carryforward_RL ._. 
Your_APPGE credit_NN1 (_( after_II applying_VVG the_AT limit_NN1 based_VVN on_II the_AT credit_NN1 rate_NN1 )_) is_VBZ also_RR subject_II21 to_II22 a_AT1 limit_NN1 based_VVN on_II your_APPGE tax_NN1 that_CST is_VBZ figured_VVN using_VVG Form_NN1 8396_MC ._. 
If_CS your_APPGE allowable_JJ credit_NN1 is_VBZ reduced_VVN because_II21 of_II22 this_DD1 tax_NN1 liability_NN1 limit_NN1 ,_, you_PPY can_VM carry_VVI forward_RL the_AT unused_JJ portion_NN1 of_IO the_AT credit_NN1 to_II the_AT next_MD 3_MC years_NNT2 or_CC until_CS used_VVN ,_, whichever_DDQV comes_VVZ first_MD ._. 
If_CS you_PPY are_VBR subject_II21 to_II22 the_AT $2,000_NNU limit_NN1 because_CS your_APPGE certificate_NN1 credit_NN1 rate_NN1 is_VBZ more_DAR than_CSN 20%_NNU ,_, you_PPY can_VM not_XX carry_VVI forward_RL any_DD amount_NN1 more_RRR than_CSN $2,000_NNU (_( or_CC your_APPGE share_NN1 of_IO the_AT $2,000_NNU if_CS you_PPY must_VM divide_VVI the_AT credit_NN1 )_) ._. 
How_RRQ to_TO take_VVI the_AT credit_NN1 ._. 
Figure_VV0 your_APPGE 2009_MC credit_NN1 and_CC any_DD carryforward_JJ to_II 2010_MC on_II Form_NN1 8396_MC ,_, and_CC attach_VV0 it_PPH1 to_II your_APPGE Form_NN1 1040_MC ._. 
Be_VB0 sure_JJ to_TO include_VVI any_DD credit_NN1 carryforward_RL from_II 2006_MC ,_, 2007_MC ,_, and_CC 2008_MC ._. 
Include_VV0 the_AT credit_NN1 in_II your_APPGE total_NN1 for_IF Form_NN1 1040_MC ,_, line_NN1 52_MC ,_, and_CC check_VV0 box_NN1 a_AT1 ._. 
Reduced_JJ home_NN1 mortgage_NN1 interest_NN1 deduction_NN1 ._. 
If_CS you_PPY itemize_VV0 your_APPGE deductions_NN2 on_II Schedule_NN1 A_ZZ1 (_( Form_VV0 1040_MC )_) ,_, you_PPY must_VM reduce_VVI your_APPGE home_NN1 mortgage_NN1 interest_NN1 deduction_NN1 by_II the_AT amount_NN1 of_IO the_AT mortgage_NN1 interest_NN1 credit_NN1 shown_VVN on_II Form_NN1 8396_MC ,_, line_NN1 3_MC ._. 
