| IR-2009-14, Feb. 25, 2009WASHINGTON — The Internal Revenue Service announced today that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.
Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.
“For first-time home buyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman. “This important change gives qualifying home buyers cash they do not have to pay back.”
The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations and repayment of the credit.
This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.
The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.
For purposes of the credit, you are considered to be a first-time home buyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.
The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before Dec. 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year. |
Does the 1st home buyer get the $8000 directly? What happens if the 1st home buyer gets the refund then doesn’t buy the home?
Right now the new home owner gets the tax credit in the form of a check after they have amended there 2008 taxes or they can use it against there 2009 taxes. The best bet is to talk to your CPA or tax professional to get there input as to how it should be applied. If I understand your question correctly the answer would be the only way to get the $8000 tax credit is to actually purchase the home then file. However HUD and FHA are currently working on a method to monetize the tax credit. You will not be able to use the credit for your 3.5% down payment but you will be able to use it for your closing costs or as additional down paymnent. I will put up a post about the monetization later this week, please check back.
check out this website for FAQ and scenarios on whether or not you qualify for the credit
http://www.irs.gov/newsroom/article/0,,id=206294,00.html
Thank you Alicia for the research and link! We passed out the scenario sheet to all of our loan officers and will also post it here on the website. Thanks again!
Thanks Alicia. Feel free to let us know any and all specific questions regarding FHA loans or the first-time home buyer tax credit. All of this stuff is incentive to buy now. If you want to see where you stand as far as qualifying for a mortgage please complete an online application at http://whatisyourrate.com/apply_now/ and complete line by line. Jeff or I will contact you once we receive your application to discuss your personal situation.
what if my sister who owns the house i live in now and have been renting from her for about 5 years now and not to mention she’s been living out of state for approx. 5 years,and i would buy the house for what the house is actually worth. Would i be able to get the $8000? There is no funny buisness here. She is getting a divorce and won’t be able to afford to own it no more…..
How long does it generally take to receive the credit after you have ammended your 2008 Tax returns?
I have seen it take as little as 30 days but the rule of thumb is 60-90 days. Thanks for commenting and keep them coming!
I’ve been included in taxes for longer then I care to acknowledge, both on the individual side (all my working lifetime!!) and from a legal stand since satisfying the bar and pursuing tax law. I’ve provided a lot of advice and rectified a lot of wrongs, and I must say that what you’ve put up makes impeccable sense. Please continue the good work – the more people know the better they’ll be equipped to comprehend with the tax man, and that’s what it’s all about.
Good post mate!! Keep ‘em flowing!
We sent in our amended tax return at the end of August. It is December now and we still have not heard anything. They needed more information according to a letter on Oct. 22 and said they’d contact us within 45 days – but said we didn’t have to do anything. We called 3 numbers and one guy said it was under review. I’m thinking it is just a scam to keep my money as long as possible. I had a nearly perfect credit rating. It was my first home purchase ever. I don’t know what there is to research and why it is taking so long. No one at the IRS will give me direct phone numbers to an examiner to see if we can help expedite the process.
Part of the problem is that so many people have tried to back door the program by trying to get the credit when they really do not qualify for it. All I can tell you is to keep trying and you will get the money as long as you fit the guidelines as orginally intended. It is not a scam but they are being more careful- I have heard they are investigating up to 10% of the refund requests that have come in for fraud. Don’t worry- you will get yours, it just takes time. Happy New Year!
I write articles and ran across your blog while I was doing research – thought I’d stop by and leave a link to one of the articles I’ve written. Feel free to leave me a comment!