When we are finished, you can go home.
- This is correct
The easiest way I can think to explain the difference between 1 and 2 is:
- Finish is a verb
- Finished is an adjective
Basic grammar structure is why these two sentences are different, however, they happen to be explaining the same situation.
I could say: When we are hungry, let's get something to eat. Hungry is an adjective so we say "We are" to explain that both of us are described by this adjective.
With that being said, English has a lot of irregularities, so sometimes a certain phrase just sounds right or wrong. It's always helpful to find native examples such as articles and TV shows to find what "sounds" right.
Hope that helps!