Claim the tax credit with Intuit TurboTax or H&R Block At Home.
Are you claiming the home buyer tax credit with your 2009 income tax return? Read these new instructions. The credit has been extended and expanded to qualify for more people, including long-time homeowners. I’ve included some of the basic information below.
Because the IRS requires additional documentation, taxpayers who wish to claim the home buyer tax credit must filing federal tax returns on paper through the mail.
1. Download and complete the revised Form 5405. This form is available here. The form will guide you through the process, ensure you qualify for a credit, and determine the amount of your credit. Here are instructions for completing Form 5405.
2. Collect your required documentation. You will need the Form HUD-1 Settlement Statement or other settlement statement outlining the names and signatures of all parties to the sale, the property address, the price, and the date of purchase. If you do not have a settlement statement, as you might not if you purchase a newly-constructed home, attach your certificate of occupancy.
If you are under contract but have not taken occupancy of the house by the time you file your taxes — and you still qualify under the date restrictions above — included pages from your signed contract including the signatures and names of all parties, the property price, the address, and the contract date.
If you qualify as a long-time homeowner rather than a first-time home buyer, include Form 1098 (Mortgage Interest Statement), property tax records, or homeowners’ insurance records. The forms must cover a full consecutive five year period within the eight years ending on the date of the purchase.
3. Complete your Form 1040. Include your bottom line on Form 5405 on the appropriate line on your income tax return. On the 2009 Form 1040 return, this is line 67. You can’t claim this credit with Form 1040EZ.
4. Double-check your work. Check for the most common mistakes, such as not signing the return or using the wrong Social Security number. Review each form line-by-line and check your calculations. Any mistake will cause a delay.
5. Mail your forms and wait. When people began claiming the first-time home buyer tax credit last year along with an amended 2008 tax return, people were receiving the credit within six weeks. As more people began applying, receiving the credit took longer, particularly if documentation was missing.
Below is the original post explaining how to claim the $8,000 first-time home buyer tax credit when claiming 2008 income. This no longer applies unless you are revising your 2008 income tax return. If you are submitting your 2009 income tax return read this article.
Original article for claiming $8,000 tax credit for first-time home buyer on 2008 income tax returns
Thanks to the American Recovery and Reinvestment Act of 2009, formerly known as the “stimulus bill,” first-time home buyers are eligible for a refundable tax credit of up to $8,000 this year. Here is what you need to know in order to claim the credit.
Who qualifies as a first-time homebuyer? A “first-time homebuyer” is anyone who has not owned a house in the past three years. Furthermore, if you don’t live in the house purchased this year for the three years following the purchase, you will have to pay the credit back to the government. This credit is intended for people who live in their own houses, not house flippers or speculators.
What is a refundable tax credit? When tax professionals and the IRS talk about “refundable tax credits,” they do not mean that you have to pay the credit back to the government. A refundable tax credit means that if you owe less tax than the amount of the tax credit, you will receive a refund — even if you have no other tax liability for 2008. That’s not a bad deal. In other words, if you owe $200 to the government before claiming the credit, and you qualify for $8,000 for the first-time home buyer credit, rather than paying the government, you will receive a check for $7,800. Even if you had no income in 2008, owed no tax, and purchased a qualifying house in 2009, the government will send you a check for $8,000.
What if I bought the house last year? If you purchased a house in 2008 and were a first-time buyer, you qualify for the older refundable tax credit with a maximum of $7,500. This does require that you pay the $7,500 tax credit back over the course of fifteen years, starting two years after the date of the purchase. This is still a good deal. As time goes on, thanks to inflation, you are paying back this “loan” with money that has smaller purchasing power.
To qualify for the new credit with the maximum of $8,000, you must be a first-time home buyer and the sale must take place between January 1, 2009 and November 30, 2009.
Do I qualify for the full $8,000? The actual credit you will receive is 10% of the purchase price of the home or $8,000, whichever amount is lower. If your modified adjusted gross income (MAGI) as a single taxpayer is over $75,000 or if your income as a married couple is over $150,000, your credit will be phased out. The credit will be eliminated if your income is above $95,000 (single) or $170,000 (married).
How do I claim the home buyer tax credit? You can claim this credit when filing either your 2008 or your 2009 income tax return. For example, if you believe that your income level in 2009 will be too high to qualify for the credit but you already know that your 2008 income is low enough to qualify for the full amount of the credit, you can claim the credit on your 2008 income tax return.
Complete IRS Form 5405 to determine the credit amount. Here is the official revised copy of Form 5405 [pdf] that takes the new $8,000 home buyer tax credit into account. Take the bottom line amount on Form 5405 and enter the number on line 69 of your Form 1040. Not all online tax preparation software has been updated to include instructions for this new credit. I checked H&R Block Tax Cut, TaxACT, and TurboTax Online, and as of last night all three include only the rules for last year’s $7,500 credit. You may wish to wait for the software to catch up with the IRS before completing and filing your 2008 income tax return. Or, if you don’t want to wait, you can do your taxes by hand. See new updates at the bottom of this article for TaxACT and TurboTax.
If you have filed your taxes already, you will be required to file an amended income tax return if you want to receive the credit this year with your 2008 refund.
Please keep in mind that I am not a tax professional and none of what is written here or anywhere else on Consumerism Commentary should be considered tax advice. You are solely responsible for your own tax return, and any questions should always be directed to your tax accountant or the IRS.
2:00 pm update: TaxACT has contacted me to let me know that as of today, February 25, their software has been updated to correctly figure the $8,000 first-time home buyer credit. I’ve confirmed that the new calculation is now active.
February 27 update: A representative from Intuit has confirmed that TurboTax has now been updated to include the $8,000 home buyer tax credit and the change should be in effect today. I don’t see it as of 4:00 pm, but I will check again later tonight. Originally TurboTax planned on putting this update into effect as late as March 11.
Here is what a TurboTax representative said: “As with any tax changes, especially those that come very late in the season, we are reliant on the IRS to provide guidance so we can update the product accurately and completely. Once the IRS gave us the correct guidance and requirements, we immediately started working to update.”
Updated March 21, 2011 and originally published February 25, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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thanks for the updates, good information to know!
I do feel bad for those who bought last year though, and who won’t just get the credit – and instead will have to pay it back. Oh well, i guess life isn’t fair!
I purchased last year, and I feel sorry for myself! I missed out on 8K.
Peter: That’s true. People who purchased in 2008 thought they were getting a good deal. You can never know if a better deal is coming down the pike. It’s best to buy a house when you need to buy a house. A small tax credit (or loan), while helpful, probably shouldn’t be the driving force behind the decision.
Does it completely expire in Nov. or is there any talk of extending it? I ask b/c I’m planning on buying a new home in June 2010 (saving for the right down payment now). 8,000 could go a long way towards helping.
I don’t think there’s any talk right now of extending it because it was just signed into law, but laws can and will be changed.
Thanks for the advice. Answered a few questions I was looking for.
Closing on a home April 1st, so should be just in time.
Thank for sharing this info….. I own the house with other couple (married). We are joint tenancy, so do you have any idea how to allocate this credit.
For joint tenancy, the credit should be claimed in proportion to each owner’s share in the residence. Best way to do that, as far as I can tell, is take the purchase price and split it according to your ownership percentage, but check with your tax professional.
My husband and I closed on our house 3/28/08. Our accountant says that we missed the first deal by 12 days. Grrrr!!! We are getting ready to refinance our house because the interest rates have dropped so much. Will this then qualify us or are we just S.O.L.?
Lisa: Unfortunately, you can’t qualify for the credit with a refinance.
Do you know if our mortgage banker or realator would have known about the $7500 tax credit where they could have informed us to wait 12 stinkin’ days?
It’s likely they wouldn’t have known about it in March 2008. The $7,500 credit was signed into law in July 2008.
We sold our house in Sept of 2006 but due to the buyers financing we had to “re” close Oct. 12, 2006 and will close on our newly constructed home Oct. 1, 2009. Will be be able to get the credit? In Sept we had to be out of the house, give the keys to the new buyer and then was called the next week that we needed to “re” close….I cannot adjust my Oct. 1st closing the bank says our construction loan is up and we must close on that day….Help!
Well, that takes a little bit of the sting out of the whole situation! You’ve been quite helpful. Thanks a bunch!
Two questions: We’re building our own place on land we’ve owed for a couple of years. If we can get a certificate of occupancy by the deadline, do we qualify? We’re building it ourselves, not using a contractor.
And since it probably 1) will be valued at slightly less than $80,000, and 2) won’t be appraised at all right away, how would be know how much of a credit to claim?
My husband and I are building a home too. We started building in Oct. 2007 and moved in in Oct. 2008, although the house is not done yet. What do you use as the date to qualify for the tax credit? Our house has not yet been appraised, because we are waiting to it finished (we are building ourselves).
Just one question, what is the cut off date if we buy a home this year to amend our taxes that we have already filed for 08. For instance if we buy a home on April 25 can we still amend or does it have to be before the 15th?
Andrew: November 30 is currently the last day you can buy a house this year to qualify for the $8,000 (maximum) credit. You can file an amended return.
I was told that you have to file the ammendment by April 15th to get the credit this year, like a normal tax return. If filed after that, they may not accept it or give the money back till next year.
Jessica: There is no indication in the law that you have to file an amended return by April 15 in order to qualify for the credit. File by April 15 to avoid a penalty, or file for an extension. You can file an amended return at any time, and the rules don’t change. Check with your tax professional.
I qualify for the $8,000 credit. I used TaxAct Free Edition e-file on 3/3/09 and just received an email from TaxAct stating my return had been “rejected by the IRS” because the IRS is not yet allowing the first-time homebuyer credit of $8000 to be electronically filed.
Needless to say, I am a bit pissed that I spent time filing with TaxAct and now they tell me this after the fact. I am astounded at how uninformed all of these tax preparation/tax filing services are.
I had the same exact problem! Is TaxAct going to charge us again to submit our taxes? They should have told us before we submitted the revised 5405 that it’s not be accepted yet. Also, how will we know when we can e-file this?
I’ve contacted Tax Act. You don’t get charged until your E-file has been “accepted” by the IRS. If it was rejected due to the $8000 First Time Home Buyer Credit, you will not be charged. I am going through the exact problem. I just wish we could find out WHEN the IRS is going to get their act together!!
Just had the same problem with TaxAct e-file yesterday (March 9th); got the rejection notice this morning (March 10th). Notice says that the IRS has given an estimated timeframe of resolution as “the next two weeks”, which is uncomfortably vague. I called the IRS to gauge whether filing a paper return would be a better option, but the rep was noncommittal, just saying that a paper return with direct deposit is six weeks maximum.
I would hate to wait two weeks for to e-file, only to be told it will be another two weeks for the problem to be fixed, when I could have gotten the ball rolling on a paper return. This sucks…
You will be able to e-file on March 31st! See the below
info that I got from TaxAct.com
UPDATE 3/11/09 The IRS has issued a statement that returns with Form 5405 claiming the First-Time Homebuyer Credit of $8,000 for homes bought in 2009, will be accepted electronically at the end of March. Please resubmit your return on Monday, March 30, 2009 after 6:00pm CST.
We closed on a property on April 18 2008 and were able to get the tax credit of 7500.00, or I should say interest free loan. I must say I am thankful for this opportunity. However, I am looking into purchasing a Business/Apartment building in tax year 2009, and was curious if I could also cash in on the 2009 house tax credit? Thank you
Hi Jems:
Unfortunately, the IRS only allows you one bite at the apple. If you have claimed the 7500 credit, you cannot receive the 8000 credit. Sorry.
If you purchased your house in 2009 and have already claimed the $7500 credit you can file an amended return and get the $8000 credit.
I purchased my new home in 2009. file my taxes this year 2010. the IRS rejected my $8000 credit
That response is a little hard to interpret.
One reason you can’t get the 8000 credit is because you’re buying a business/apartment building. The credit is for a HOUSE.
Even if it were a house, you already bought one in April of 2008, so it wouldn’t be a first-time home.
Sorry. I also forgot to mention, for those who actually do qualify for the 8000, but already accepted the 7500 credit… you CAN file an amended return for the 8000. So don’t think just because you already accepted one, you can’t get the other INSTEAD.
Remember, you have to buy a main HOUSE without ever owning one in the last 3 years and it has to be purchased from December 1, 2008 to December 1, 2009.
Thanks!
MY HUSBAND & I JUST BOUGHT A HOME ON 1/15/09, WE ALREADY DID OUR TAXES WHEN WE AMMEND THEM AND FILL OUT THE FORM 5405 WHAT PAPERWORK REGARDING THE HOME DO WE HAVE TO SUBMIT WITH THE FORM FOR PROOF OF BUYING, IT DOESNT SAY ANYTHING IN THEIR INSTRUCTIONS!
I signed on a refinance on my mother’s home about two years ago… now my wife and I want to purchase a house this year does that mean I don’t qualify for the first home buyer tax credit?
I am still confused…a couple of tax preparers have told me that I can’t take the credit on my 2008 return, even though I plan to buy a home this year before Nov. 30. But IRS website says that the new version of the credit is designed to put money in homebuyers’ hands right now. Help me understand please. I know it may sound like a dumb question but I was always told in school that there are no dumb questions : ). Thanks in advance.
The tax preparers are correct. You can’t take the credit if you only *plan* to a buy a house. The house has to be purchased by the date you file. You can file for an extension on your tax return, which would give you time to buy your house before the November 30 qualification deadline.
I HEARD THAT ANYONE WHO HAS NOT OWNED A HOME FOR THREE
YEARS WILL ALSO QUALIFY FOR THE INCENTIVE IF A HOME IS PURCHASED.
ALSO, A TAX CREDIT FOR THE PURCHASE OF A NEW CAR. DOES IT HAVE TO BE AMERICAN MADE?
My wife and I bought our house in early 2009, and we’re filing for the $8,000 tax credit on our 2008 taxes. Our return (Through TaxAct) was rejected like the other posters above, because the IRS isn’t accepting eFiles with $8,000 credits in them yet.
The note from TaxAct says that it will be roughly two weeks until the IRS updates it’s system to accept eFile-d returns with the $8,000 credit. We got the rejection on March 1, so we’re hoping things will be cleared up by next weekend (March 14-15).
Is there a page on the IRS website that will tell us when we will be able to resubmit our 2008 taxes? Or, should we continue checking the TaxAct website, looking for a re-submit button?
Just file the $7500 current credit and then file an amended return later. That way you are only waiting for the additional $500.00.
You will be able to re-submit on 3/30/09 after 6:00 pm CST. Check TaxAct’s website and you will see it for yourself.
Okay we are in the process of buying a house. We have already filed our taxes and got our return are we eligible for the $8K tax stimulas credit?
If you qualify as a first time home buyer, if your income level doesn’t disqualify you, and if you complete the purchase and move in by November 30, you will need to file an amended 2008 tax return.
Hi,
I have never purchased a house before, however my boyfriend has owned previously and sold his house in 2007. So, it has not been 3 years. He makes over the $75,000 threshold, I make less than $75,000. If we purchase the house together, will I be able to claim the house alone and get the credit?
If you normally file your taxes separately and it is your name only on the deed, then I would guess yes. If both names are on the deed or you file together, then probably not.
One simple question. Does the tax credit apply only if I buy an existing house or will I be eligible if i build a new house?
From what I have read you would be eligible if you built the house and moved in before Nov. 30, 2009
A few years ago my mother add my name to the deed of her house and property. Did doing so make me part owner and exempt me from the tax credit?
Did you ever get an answer to this question? If so, what state are did you file from?
I am buying a home and closing on May 15th. My mortgage person and real estate agent believe that there is a cut off date of March 31st for being able to amend your return to get the tax credit.
I checked with Turbo Tax and there is no mention of a cutoff date that the home must be purchased by the 31st, so I sent away the amended return. I would have thought that Turbo Tax would have stopped me when I put in the date of when the home was purchased (May 15, 2009). I am really confused. Do I qualify or am I out of luck?
March 31 is not the correct cut-off date. Homes purchased this year before or on November 30 qualify for the $8,000 tax credit *but* you can’t put a future date on the form. If you file your taxes now, you will have to file an amended return *after* you buy the house. Or you can file for an extension now. From what I understand the IRS is not yet accepting tax returns for people claiming the $8,000 through online services like TurboTax yet anyway.
No, the cuttoff is April 15 per my lender to ammend your taxes for This year. The cuttoff for the credit in general is Nov 30th or something like that, but after April 15th you have to claim it on your 2009 taxes, not 2008. This is what I was told and it makes sense since taxes are due by April 15th.
As far as filing an extension, that may work to be able to claim it this year, but I would ask a tax professional just to make sure.
Amended returns only need to be filed before April 15 if they would result in owing more taxes to the government, and in that case, the only thing that will happen is you will be charged a penalty as a percentage of the additional amount you owe. You can still avoid that penalty by paying the additional tax before April 15, whether you file the amended return by then or not. You can file amended tax returns for several years.
If you’re expecting that your amended return would result in a larger refund, as in your case, it’s actually better to wait until after you’ve received your first refund. That gives the IRS a lesser chance of sending the incorrect amount. Yes, the IRS can make mistakes, too!
As always, check with a tax professional, particularly one who is familiar with the $8,000 tax credit for first-time home buyers. There seems to still be a lot of misinformation out there.
Ahhh, I see. well like I said that was just what was told to me, when she said I could ammend she said I had to do it by April 15th but yeah, I just ammended my 2007 return for money I forgot to claim, but see this year we will be over the threshold. We were only like 250.00 under it this year and that’s why I want to claim it in 2008. Anyway, I stand corrected.
I file 08 taxes in October 09 using Combat Zone Tax Extension (CTZE). I guarantee you I can file after April 15 my 2008 taxes and also get the credit no matter what your tax preparer says
You CAN amend your return at anytime to claim the credit. I have clients that amended in May and have received their money, while I also have clients who amended April 15 and have not received anything yet.
I need help – my husband and I closed on our first home on March 5th, 2009. I had already filed my return so I was told to do the ammeded return and to use the revised 5405 form. Ok that’s easy, no problem. But then the actual 1040X ammendment form is not so simple. Everytime I input everything they ask it never amounts to me getting back the 8000, and we are below the threshold, so I don’t understand…do I need to fill out this form? It says subtract this and put difference here but not less than 0…if I put in the actual amount it would be less than 0 and I think then it would add up but as of right now it is not. It is confusing me a bit. I file my own taxes every year and am a Realtor, but have never done an ammendment…I just can’t bear to give someone 80$ to fill out one sheet of paper, I am going to need every cent of that money to do updates to this house… has anyone else done the ammendment themselves yet for this particular situation/credit?
nevermind I figured it out. So I am going to attach a copy of my HUD as proof, since I’m doing this myself and don’t have a tax person doing it. Hopefully that, the ammended 1040X and the 5405 are all I need to send and I’ll be good to go. I just had to send them a check for 277 for an ammended 2007 return, so this is much more exciting!
Hi Jessica,
I’m on the same boat as you are. I have both the 1040X and 5405 forms, but have no clue on how to include the $8000. I made an appointment with a tax person tomorrow, but I rather not if it’s simple.
Please help.
Thanks,
Ethel
Ok, here’s what mine looked like… the 5405 was easy for me, my house was above 80,000 and we were below 75K for income, so basically you just enter your adj gross income from your tax return and the 8000 credit. The 1040X is like this:
First of all, make sure yours says (rev. February 2009) at the top under form 1040X. This is the one that includes the form 5405 in the payments section on line 15. That was one of the biggest mistakes I had made.
Enter the info at the top just like it should be, self expanatory. For Income and Deductions, if the only thing you are ammending is this credit, then you can leave this section 1-5 blank. I opted to fill it out, just enter #’s from your 1040. actually that’s all you do. If you have your 1040, then here’s a key to go by:
(1040X = line x from 1040)
6. = line 44.
7. = line 55.
8. = difference or line 56.
9. = any other taxes on lines 57.-60. I had 0
10. = line 61.
11. = line 62.
12. = line 63.
13. = line 64a.
14. = line 66. (another mistake I had made was I put the child tax credit here instead of on line 7.)
**15. = line 68. BUT this is where you put 0 on the first line (if you didn’t receive any of the listed credits) then put the 8000 on line b and 8000 again on line c if you are claiming the whole 8000. This should be the only line that has a change up to this point if this is the only thing you need to ammend. Every number before 15. should have a 0 in the middle column and columns a and c are the same numbers.
16. = line 67.
17. = any $ you had to pay in when you filed. If you got a tax return this should be 0.
18. = Add lines 11-17. on the ammendment form.
19. = Amount of your refund from this years return if you received one.
20. = subtract 19 from 18. (18.-19.)
21. = probably 0
22. = If line 10 column c is less than line 20., enter the difference. This should equal 8000 if you filled out everything correctly.
23. = 8000 if you want it all refunded to you…
Ok I know it looks confusing, but if you take it one line at a time and have your 1040 in front of you and the attached instructions for the ammendment form onhand, its not hard. The most important thing is to make sure you don’t change anything from the tax return other than that credit on line 15.
Also, I’m sending a copy of my HUD with it and the 5405 as proof of the sale… I hope this helps! Ask me if you have a specific question and I’ll see if I can explain it better.
6. = line 44.
Jessica,
I read your directions on how to complete the 1040X and it was very helpful except I am having some trouble completing my form. I originally filed a 1040A so I couldn’t follow your instructions completely. My questions:
1) If the 8000 credit is the only thing I am changing do I need to fill out anything before line 15?
2) Line 18 should be $8000, correct? Line 19 asks for my overpayment which I believe is the amout of my refund. I received a refund so I enter that amount so when I enter the amount of my refund and subtract fom line 18 then I get an amount less than 8000 which results in me getting less than 8000 as a credit. Can you tell what I am doing incorrectly?
Thanks for any help you can offer!
Jessica,
I have a question, do you apply for the credit before the purchase of the house or afterward? Do I have to pay for closing cost and downpayment upfront and rec’d the tax credit afterward?
Thanks for this GREAT 1040x & 5405 guide. It made the filing process easy. You are a lifesaver!
Thanks for taking the time for this step by step guide.
I had no idea you could get the credit on 2008 taxes. My wife and I close on our house on Friday. We thought we’d have to go through the rest of 2009 with our savings depleted from the home purchase. This info will help us out tremendously. Looking forward to filing the amended tax return tonight. Thanks Flexo!
I didn’t know either until I was sitting at the closing table. It will take around 8 weeks to get it probably, but I know, I’m in the same situation, just spent 6 grand, I’ll probably just put the 8 grand into savings for now as emergency fund and let it earn interest…my husband’s job is secure, but in this economy things can change unexpectedly and quickly, so just in case its better to be safe than sorry. I have several friends who have lost their homes this year due to job losses in our area (East TN) and here I am buying! But you know, we worked very hard for several years to get to this place and I wasn’t about to pass up the opportunity to buy a house I’ve walked by and loved for years and years.
Good Advice from a Realtor (who specializes in valuating foreclosed homes for Bank REO’s.)
Put money in savings and don’t invest too much in your homes until market stabilizes some, b/c most places do not see a return on them in this market. There are some markets that are doing good, but they are few and far between. Here, typically you see about 4-5 times the number of active comps in any given area compared to the number of sold comps in the last 6 months or even up to a year in some cases. Values have dropped significantly. Remember that irresponsible buyers combined with unexpected layoffs/business closings and Crappy ARM loans caused this!!! (make sure you are getting a fixed rate loan and make sure your rate is locked in!! Research rates and typical closing costs and be an informed buyer! Listen to your Realtor and of course use one! :) but confirm things and get at least 2 lender quotes.)
Oh and prepare for the unexpected. Get a home warranty and definitely get a home inspection. Ok I think those are the most important rules.
Anyway, Good luck and congrats to all the new or soon to be homeowners!
Good advice there, thanks for sharing!
Jessica, Not everything said here was bad but if I were people I would talk to a bank lender, especially if it was a smaller community bank, instead of talking just to a Realtor. That is because a bank wants to develop a relationship beyond the sale of the home. For example, it never hurts to upgrade your home. With some community banks you can even borrow the money upfront and if you do the labor yourself, your “sweat equity will be counted towards your downpayment. Number two all ARMS are not “Crappy” and many times are the right way to go. I have seen many people pay higher costs and PMI because they thought they had to have a fixed rate loan. A banker who cares, and there are those out here like myself who do, will explain the difference and suggest the proper strategy based on your personal situation. It is never a “one size fits all” solution. I would never say do not listen to a Realtor or not to go to one, but when it comes to the finance part, consult a banker who would prefer to have a long term relationship with you, not just a one time transaction. I am not saying all Realtors are like this but I have see many who develop relationships with entities who write loans but provide no other financial services to the customer and it ended very bad for the customer. Community bankers have a vested interest for you to succeed.
…which is why I used a community banker for my home that I just purchased and why I said to speak to at least 2 lenders, because they also have different programs and specialties. Hey, I am not a Realtor who has a professional relationship with ANY lender in terms of referring or whatever. I do BPO’s and that’s it, I do not list or sell property. I am not trying to give advice over a lender’s or even say that I know it all, but personally I do 25-30 market valuations monthly for banks, and 90% of the foreclosures are ARM loans, so the way I see it, for most people it is not the best deal, not when you can get a low fixed interest rate that is at least a for sure thing, no hidden charges or penalties or a sudden jump in interest b/c you have 1 late payment. We are talking about people who went from 6% interest rates and $1200/month payments to 12% rates and 2300/month payments after a year or two. The point is to GO to 2 or more local lenders be it your bank or a mortgage broker, whatever, and personally sit down and talk to them and find out not only who has the best plan for your individual needs, but who you feel like you can trust, because I have been burned in the past and it is possible for them to say one thing and it be another thing completely. Also, it is always smarter to save your money than spend it unless its a necessity, and considering what my job function is, I do think that I know what I’m talking about as far as investing in your house, and lastly, the entire point of my comment is, EDUCATE yourself. Do not blindly trust Anyone! In this economy, especially, ugly sides of people can be revealed. Make sure you do your homework and above all, you and your family’s current and long term goals/needs are #1 priority.
I was watching a recent episode of the Today Show which featured a woman who was talking about the new home buyer’s credit. She was saying that the $8000 can be applied as a downpayment. I have seen no other assertion of this anywhere but if true would greatly speed up my purchase this year. I downloaded the 5405 form and it appears to require an address of a qualifying home but line three seems vague to me. If anyone has any thoughts on this I would appreciate it.
I have not heard this. It takes 8 weeks to get it back, I guess it would require your lender to allow the funds to come back later as a down payment or something. I thought you couldn’t file for it until you’ve actually purchased the home. That is why it says date acquired. Date you purchased it.
Hi, Im a little confused…..I purchased a home after high school (2001) in my maiden name, married in 2005, sold my home in 2008 and my husband and I have now built a home and closed 2/1/2009, the home is now in both our names Does this mean we qualify for the 8000. tax credit or not? I wasnt sure if because he was a first time home owner or because we now are married tax payers and this would be our first home as a married couple if we qualified?
Unfortunately, you would not be eligible for the credit as you were a homeowner in 2008. To be eligible for the credit, you nor your spouse must not have had an ownership interest in any home for 3 years prior to the date of purchase of an eligible property.
Your husband might if he hasn’t owned a home in the past 3 years. Check with an accountant. They can tell you for sure.
If you sign purchase agreement in December 2008 for a new home that just began construction and closing will not be until June 2009, does that qualify for $8,000 credit? If so, can it be used on 2008 tax return? If not, does that qualify for $7,500 credit? Also, if requesting direct deposit, does it still take eight weeks to receive it?
Your closing date is considered your purchase date on new construction as far as the IRS goes, so if you meet all other eligibility requirements, your June 2009 purchase date would quality you for the $8,000 credit. You could file an amended return after your regular return to add it to your 2008 tax returns, or wait and claim the credit on your 2009 taxes.
I just read over the information on the IRS website and it says that for homes that you are having constructed, the “acquired” date is the date that you move into the home. Again, this is only for new construction homes.
Yes, I read that the date of your certificate of occupancy serves as the “acquired” date for newly-built homes.
Can anyone answer the other part of my previous question? “If not, does that qualify for $7,500 credit? Also, if requesting direct deposit, does it still take eight weeks to receive it?” Thanks.
You qualify for the $8000 tax credit. I’m not sure on the time line.
Thank you for all the posts above. Very helpful I will wait until March 31st to use TaxAct.
I didn’t see anyone talk about the information on Page 2 of form 5405 ” Amount of the Credit.
My Condo was 60K and my income is under 75K.
I see everyone saying that the credit is equal to 10% of the home price or $8,000 which ever one is less HOWEVER,…
The instructions on page 2 say ” You are allowed the full amount of the credit if your modified adjustable gross income is $75K or less ”
To me this says I can get the full $8000 not just the 10% which to me would be $6000.
Any comments would be very helpful. Thank You.
Mike
Mike: For you the full amount of the credit is 10% of the purchase price. The instructions on page 2 that you are referring to discuss the phase-out. If you earn over $75k, your full amount ($6k) would be phased out proportionally.
Mike, you would qualify for the 8000 credit so forget about the 7500. The credit would be 6000 if your loan was 60,000. The whole you being able to claim the whole allowable refund is the whole allowable 10% or 6000. No you cannot get it quicker. You can’t even claim it on taxcut yet so go ahead and file your taxes now and after you’ve closed on it or moved in, then you can send in a 1040X and a 5405 to ammend and get the 6000. You can’t file for the credit until you actually have purchased the home because many deals fall through on the day of closing, so obviously they aren’t going to give you money until the sale is complete. As far as the time it takes to receive, I efiled my return and had it electronic drafted but you can’t do that with this new credit, so be prepared to wait it out to get that money. I don’t know if you have your normal refund electronic deposited if the $8000 will be too, or if they will mail you a check, but either way it will probably take awhile to process, and the electronic deposit would only be a few days quicker than the check in the mail anyway…
Hi Jessica,
My husband and I purchased our first home on 3/11/09, after we received our 2008 tax refund. I prepared our taxes myself, and am wary of paying someone else to file an amended return to include with this new credit. Did you file you file an amended paper return or did you file using an online service, such as taxactonline?
Thanks,
Phoenix
If my friend adds my name to his mortgage can I qualify for the credit?
Do you know if there any kind of organized effort to push for similar retroactive treatment for homeowners who purchased in 2008?
Those homeowners did not require the extra incentive to purchase (which is what the whole credit issue is about), so why implicitly “punish” them for buying early. I personally know of some buyers that pushed through an expedited closing so that the purchase would occur in 2008 in order to claim the credit on the 2008 return; there was no option to close in 2009 and still claim.
I’m not looking to debate, I’m just wondering if anyone is aware of anything for such homebuyers to become involved with in an effort to obtain consistent treatment.
Many thanks.
I am wondering if I can sell my home to my son he would be a first time home buyer and would qualify for the 8000.00 but someone said there is a provision about selling to relatives for the 2009 rebate? Anyone know any info? Thanks
That will not work. If you are trying to get the 1st time homebuyer credit, you can not have purchased the home from a relative.
I am interested in purchasing a home in the next couple of months. My Husband has owned a home within the past 3 years, but I have not. Does this disqualify me for the credit?
My wife & I e-filed w/ H&R Block last month and owe the IRS…for math’s sake, let’s say $1000. We never wrote the check for $1000. So when we go to fill out our 1040X, do we just specify $7000 on line 23 (“Amount you want refunded to you”)…?? Or should we specify $8000 and assume the IRS knows we still owe $1000 and to send us a $7000 refund. OR should we go ahead and send the $1000 owed, specify $8000 on line 23, and just wait 8-12 weeks for the $8000? We’re just looking for some clarification. Thanks in advance!
My son is interested in purchasing his first home instead of throwing away his money on rent. Unfortunately, he has not established enough credit to purchase a home on his own this year. What if I co-signed for him and have him listed as the owner? Would he be eligible for the tax credit when he files his tax return for 2009?
Hey guys,
Just trying to see if anyone tried to use TacAct yet to file the 08 taxes with the new credit for homes purchased in 2009. I’m waiting until March 31st to try it. Sure hope it works.
Mike
The IRS won’t accept returns claiming the new $8,000 tax credit for homes purchased in 2009 until 7:00 pm EDT on Monday, March 30. I’d suggest waiting until March 31.
I filed mine on TaxAct yesterday. Was approved today with no problems. Yay monies (Though nothing is ever really free)!
My fiance and I have just gotten our loan and purchased our lot to have the builder start on our home. They are saying it will be move-in ready by Aug./Sept. I am unsure as to when we would be getting the refund. We qualify for the refund, but we won’t close on the house until it’s finished being build this summer/fall. Is it possible to get the money early for closing fees etc. or do the send this after you close?
I have the same exact question. We too bought a land and the contractor has started building it and we hope to get our house by summer. Can someone tell if we can file for the $8000 credit now. We have yet not filed our taxes. TIA
I am considering buying a home later this year.
I made $96k in 2008 and am projected to make $90k in 2009. Would it make sense to have my employer defer $15k of my income to 2010 so that I can qualify for the full credit?
We have signed the agreement to buy a home from a reputed home builder. We have paid them a decent amount with the agreement and have the home cost, and all the details in the agreement. But the house will be delivered/closed in fall. Can we file for house credit this year, or do we have to wait until next year to claim the credit. I would really appreciate if someone could help clarify this. Thanks in advance.
Great page. I have a question. What if you qualify for the $8000.00 tax credit that you don’t have to pay back, but you filed your taxes already and took the $7500.00 credit that you do have to pay back. Can your return be amended to change the status of the credit on your records with the IRS so they’re not coming for the money in the years to come, as well as to receive the additional $500 ?
Yes, my son filed the amended return to receive the $8,000. he had already filed his taxes with the $7500.00. He will not have to pay it back but will have to wait up to 12 weeks for the extra $500.00.
My husband and I closed on our house March 31st. We have been working on our taxes for over a week now and turbo tax is still rejecting our $8,000. We were told it could be a problem with using window’s vista and should try using window’s xp. This is very frustrating and before I enter my information again I would like to get some advise on if it’s Window’s vista causing the problem, or if they are still not accepting it through EFile. I saw a post earlier saying that TaxAct is accepting the new credit through Efile, so has anyone been accepted yet through Turbotax yet and if so, did you have the same problem before, and if so how’d you fix it?
Can you please explain why a married couple where only 1 was a (in past 3 years)homeowner, cannot even claim 1/2 of the Credit, however, an unmarried couple can, in same situation, can claim full credit? My understanding is even if you filed separate returns, being married disqualifies you from the credit. Without proper explaination, this really feels like discrimination. ??? Btw…telling me it is just the way the law was written doesn’t float…because the HUD definition of First Time Home owner states if one qualifies, both do.
hi, i bought a house in march 09,i called the place that does my taxes and she said if i filed a amended return for the 08 tax year, that i would only qualify for the 7,500 and i would have to pay it back over the next 15 years, but if i wait until i file on my 09 tax return that i would get the 8,000 and never have to pay it back.but by what i’ve read myself it seems to me that i would qualify for the full 8,000 no matter if i did a amended or if i waited until i filed my 09 taxes.does anyone know which is correct?please help if you can. thanks
What happens if you receive the $8,000 & don’t end up buying a house? -JL
Move to Mexico
I am going to file 1040X and 5405 to claim for first-time homebuyer credit. Do I have to submit anything else? (for example, a copy of “buyer final closing statement”, proof of puchase). Thanks.
Can you claim this credit if you purchase a home on a Land Contract?
Hi — My brother and I are planning to buy a home this year. The loan will be in my name while the title will have both our names. This will be my brother’s first home and his MAGI will be below the $75k/95k limit. I will not qualify since I have purchased a home a few years back.
I combed through Form 5405 and numerous other sites and they all use the term “purchaser”. Will my brother be considered a purchaser and qualify for the proportionate amount even though his name is not on the loan (but on the title)?
Much thanks for your feedback,
Matthew
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