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Are You Still Waiting for the Homebuyer Tax Credit?

This article was written by in Real Estate and Home, Taxes. 13 comments.


The first-time homebuyer tax credit was a major incentive that the government, in collaboration with the real estate industry, initiated to stimulate the economy. It’s understood that the tax incentive worked in the short-term, encouraging more home purchases for a period of time that continued to be expanded by Congress. Nevertheless, the housing market continues to be in a slump. The index of home prices was down again in the most recent reports.

What happened to taxpayers who applied to receive the tax credit? For the most part, filers who included all the required forms received the credit in about six weeks. Anyone who didn’t file the paperwork properly found their applications under review, and the IRS quickly became overwhelmed with the requests. As a result, even taxpayers who filed the proper paperwork and are rightfully owed the credit were faced with delays and problems.

There are still taxpayers to whom the government legitimately owes the credit who haven’t received a check. The government changed the homebuyer credit several times. The benefit morphed from a maximum $7,500 credit in the form of a loan that must be paid back to the government over time, to a maximum $8,000 credit available to first-time homebuyers only that would not need to be paid back, to a credit available also to long-time homeowners rather than just first-time buyers. In addition to the changing form of the credit, the qualifying home purchasing and closing dates changed frequently, as well. Tax preparation experts struggled to keep up with the changing laws.

Making the situation worse, along the way but towards the beginning of the $8,000 credit qualification period, the government changed the set of paperwork required to qualify for the credit. This was likely done to stem a flood of fraudulent applications. The IRS simply could not keep up with the research necessary to validate all the applications, so after weeks passing, some taxpayers received requests for more paperwork. After sending the paperwork in, there were instances where the IRS could not keep the information organized, and taxpayers who were counting on the credit were stuck in limbo.

It was surely a mistake for taxpayers to count on the government to distribute the credit in a timely manner. Many assumed the credit would arrive soon and planned their finances around a potential increase of up to $8,000 from the government. When the $8,000 didn’t come as expected, homebuyers were thrust into an uncomfortable financial position. Looking back, it’s easy now to say one should plan their finances only by what they have in the bank, not by what they expect to receive in the future.

Are you still waiting for the homebuyer credit? Do you think that the IRS could have implemented a better plan if the government wanted to try to stimulate the housing sector of the economy? Was all this credit mess worthwhile now that we see the real estate market is still a mess?

Photo: Images_of_Money

Published or updated June 8, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 13 comments… read them below or add one }

avatar Naomi Tapia

Hmmm… I didn’t know that “long time home-owners” were eligible for this credit. I wonder if I would have qualified! I definitely sympathize with those waiting for their credit – I hope they planned for an extra wait…

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avatar No Debt MBA

Call me cynical, but counting on the government to do anything in a timely manner is a little bit dubious. The IRS may be one of the more competent and organized units in the Federal government, but even they have their limits.

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avatar Kevin @ Thousandaire.com

I’m waiting for the government to bring back the program so I can buy a house!

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avatar wylerassociate ♦906 (Dime)

I’m not surprised that this program was botched by the government. Is this tax credit going to be expiring soon in the next few years? I thought I read that it was.

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avatar Luke Landes ♦127,380 (Platinum)

It has already expired. No new homebuyers can qualify for the credit.

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avatar shellye ♦107 (Cent)

I am confused about the long-time homebuyer credit. If I bought a house in ’06, could I file an amended return on my 2009 return to claim the credit?

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avatar Financial Independence

I would not be counting on buying $ 200 K property on $ 8 K discount. It is 4% at best. The only reason to go for it if in a long ran it is cheaper to own it, rather than rent it. One should not count on prices going up, as historically they do not : -)

The only way to financial independence is a simple but honest financial analysis. How much do you spend on renting and owning?

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avatar qixx ♦1,819 (Half-Dollar)

I don’t qualify for this program. Apparently the government will only give the credit to people that buy a home. And until buying beats renting (here in/around Seattle, WA) i have no plans to buy.

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avatar skylog ♦368 (Nickel)

i appreciate your attitude on this issue. it seemed to me that too many people went and bought a house simply for the credit. that is just insane to me. if more people had your approach, not only just with regard to the credit, but overall, a lot of pain would have been avoided for all.

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avatar South County Girl

I qualified for the $8,000 credit that I don’t have to pay back… but instead of trying to get it right away, I waited until I filed my regular taxes and applied for it along with my regular return.

It was direct deposited into my account with no problem. The people who had problems were the ones who tried to get the credit by itself instead of waiting to file.

I got a zero percent interest loan for some remodel issues in my new place and used the money for new kitchen cabinets and tile and carpet. When I got the loan, I paid off the debts. =)

and I got it awhile ago when I filed my taxes like normal. i didn’t try to file separately for the credit.

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avatar lynn ♦155 (Cent)

I wonder if it was made clear that home buyers had the option of filing at tax time? It sounds like this is the solutio to all of the changes and additnal paperwork.

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avatar J

We have been the brunt of the IRS efficiency.

We filed in 2010 for 2009, and… the check never came, and when we called they said they didn’t have the right info, and someone would have to get back to us. We never got the check.

So we filed in 2011 for the thing again, and we are still waiting… apparently it is “in review” again. nothing shady, all the forms. At least I know I am helping finance all the other crap they are promising they’ll do.

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avatar Freebyrd

I purchased a home Nov of 2009, File my tax return in march , Never recieved my credit as of today Jan 7 2013. All I kept getting was a runaround. sent several different, forms to several different places , I even sent my info in one time certified! STILL NOTHING ! I really dont know where to go from here. But boy I tell ya if I owed the IRS 8000.00 They would be all over me like white on rice!!!!!! TOTALLY UNFAIR!

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