Update: I’ve posted additional details surrounding this credit and how to claim it. Please click through to read: How to Claim the First-Time Homebuyer Tax Credit.
Okay, details regarding the House/Senate compromise on the economic stimulus package are starting to come out. As I noted yesterday, the Senate’s $15, 000 homebuyer tax credit has been stripped from the final version. In it’s place is an $8, 000 tax credit for first-time homebuyers. Note that this credit does not need to be paid back, unlike the original $7, 500 first-time homebuyer tax credit. To qualify, the purchase has to be made between January 1st, 2009 and before November 30th, 2009 and you have to stay in your home for three years. This is a refundable tax credit, and it’s phased out for individuals with AGI of $75k or higher or couples with AGI of $150k or higher.
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hi,
i bought my first house in feb 2009 than i went abroad for some business and stayed for a year… my family got their residence in 2010 november so i came back in 2011.. ans staying at the same house as my primary house.
but IRS recently sent me a letter asking the proof of my residency ..but i have no proof till 2011… will this effect my first time tax credit as i haev already taken it in 2009..
do i have to pay it back as of my situation or what explanation should i give to IRS..
please help..
How does the 8,000 first time homebuyers credit have to be repaid?
Ok, We got the tax 7500.00 We purchased the house on New Years Eve 2008. Was suppose to sign it New Years day 2009, but realtor forced it a day earlier. There is no exception for us to not having to pay it back?
Was wondering cause this will be the first time having to pay back the money and got laid off and had a new baby and was wondering if we could save 500.00$?
Please answer back .
I signed loan docs on December 23, 2008 but the property was recorded on January 6, 2009. Which tax credit do I qualify for?
I purchased a house in February 2010 and file my taxes using the $8000 tax credit. IRS still has not completed my tax return. What’s going on? I have contacted the agency twice. The first time, IRS claimed I didn’t send all the required documents. I faxed the documents to them the first time so the documents could have been lost through electronic translation or when an representative was removing them from the fax machine. So, I mailed the documents the second time (May 2010 timeframe). At which time the representative told me it would take another 12 to 16 weeks. Why does it take so long!!!!!
I closed on a house in February 2010. I received the $8,000 rebate check in late April. We bought new carpet, painted, furniture, etc. Unfortunately, we will be moving in November of this year. How do I repay the tax credit back?
I closed on a house in February, my rebate check came in late April we used it to purchase carpet, painting, furniture. Now we found out the pipes and roof are in need of repair. How do I pay back the $8,000? We will be moving in November.
You can ammend you tax return to get your credit…BUT, be sure to include any pertinent paperwork WITH the 5405 Form (it does not ask you to – do it anyway).
I amened my 2008 in July 2009…still don’t have my credit…and it is on it way now (this week)…BUT the poorly run IRS…is sending the wrong amount (too much). So….of course as we know…any mistake of the IRS turns in to our problem. Um, they didn’t look at the form!!!! OMG!
I will have to send the check back…hopefully they log I did…and resend a new check for the correct amount.
And BTW…the credit was the carrot that dangled in front of me to buy a home when I did.
This tax credit is really ineffective and much too expensive. All that was done was pull demand forward and allowed people to buy homes that they were already going to buy. In fact, a few studies found that the “real” cost of the credit was more like $30,000 to $40,000 for each additional home purchase.
A lot of the problems in the housing market were caused by too many people buying in the first place. So trying to push demand up doesn’t make sense. It also creates slight pressure for prices to go up making homes more expensive in a market that is demanding cheaper homes.
What happens when the credit ends like it just did? Just take a look at sales in the next few months and you’ll see that all we did was push sales a few months earlier.
I applied for my $8000 tax credit March 2, 2010 and received my check April 23, 2010. Its very important that you include your HUD statement along with your 5045 and amended taxes form. I called IRS twice. First to verify that they received it and second, to make sure my check was mailed off. You have to be patient though, it is a long process, but I was one of the lucky ones.
I just signed a contract on a townhouse in the beginning of April 2010 (which has to be done by April 30, 2010). I did not close on it yet, but I was wondering if I can amend my 2009 tax return to be able to apply for the $8,000 tax credit. Can someone let me know? Thank you.
Carmen Arruda,
Interesting comment but while those 1 million or so people may have bought a house regardless of the credit it will however give them a boost after having to fork out a down payment and closing costs. It is designed to help stimulate poeple to want to buy but also keep poeple from struggling during their first few months of mortgage payments. Because way too many poeple “jump” into a mortgage when they are not prepared for it and end up in a really bad financial situation in the first few months. While those numbers seem impressive @ 32,000 per person, reality is that each of those people recieved the 8,000 not 32,000. Anyone can come up with an equation for something like that. lets say I have 10,000 friends and 5,000 of them are having a difficult time with their bills and i could give them 10,000 dollars each to aid them in resolving their debt. I wouldnt just blindly give them 10,000 each. I would setup guidelines where any of my 10,000 friends would be able to get my help as long as they met the guidelines. While only 5,000 of them are having troubles paying their bills, some or all of the others could qualify for the help as well. Though the other 5,000 friends would probably be paying their bills on time whether they took my help or not they are still able to get it. So, the 1,400,000 poeple each received 8,000 dollars. While only 350,000 poeple only bought a house because they where going to get the money after they closed doesnt negate the fact that the other 1,050,000 took the money as well. Having been a fellow tax payer myself for several years now, it feels nice to get a little chunk back. The government gets their(our) money back over time anyways by means of property taxes, income taxes and sales tax. My personal opinion on the matter is the US has way to many politicians being paid by our tax dollars just to create a job for them. I know there has to be hundreds of tax payer paid government employees that have some flaky job for determining what color pencil another government employee should use and could be trimmed out of the system with no effect on the stability of our government other than to free up tax dollars.
The Tax credit was designed to stimulate the housing market and that is just what it did. It worked as intended. We live in a reality with real math happening everyday so there is no room for equations that don’t actually happen:
(350,000 * 32,000=11,200,000,000) The Equation should read and does read (1,400,000*8,000=11,200,000,000) Thats what happened, nothing else… its crazy formulas like that, that get strung out and misinterpreted.
And thats my 2 cents,
Thomas G.
the 2009 $8000 tax credit that does not have to be repaid was created under the Obama Administration…
well the 2008 $7500 tax credit that has to be repaid was created under the Bush Administration… nuf said…
I just want to state for the record that last night during the President’s speech he stated that we have been in a recession for two years, why then do the people who took the first time homebuyers tax credit have to repay it, the Government knew we were in a recession and that’s why they offered it.
For everyone’s reading concerning the 2008 and 2009 tax credit’s. This information is quoted straight from the IRS.gov website. Please refer to IRS.gov or a professional tax preparer.
*For 2008 Home Purchases*
The Housing and Economic Recovery Act of 2008 established a tax credit for first-time homebuyers that can be worth up to $7,500. For homes purchased in 2008, the credit is similar to a no-interest loan and must be repaid in 15 equal, annual installments beginning with the 2010 income tax year.
*For 2009 Home Purchases*
The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1. However, the new Worker, Homeownership and Business Assistance Act of 2009 has extended the deadline. Now, taxpayers who have a binding contract to purchase a home before May 1, 2010, are eligible for the credit. Buyers must close on the home before July 1, 2010. [Added Nov. 12, 2009]
*For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer’s main residence within a three-year period following the purchase.
*First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. News release 2009-27 has more information on these options.
*General Information*
Homebuyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit:
*Applies only to homes used as a taxpayer’s principal residence.
*Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
*Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
Sickdogg,
No, the 2008 $7,500 “loan” was for purchases made during 2008 and the 2009 $8,000 “free credit” was for purchases during 2009. They did however make an ammendment for non-first-time homeowners to receive upto a $6,500 credit during 2009 and I think it is being extended into 2010. I personally closed on my house as a first-time homebuyer during February of 2009 and ammended my 2008 taxes to recieve the $8,000 “free credit” because the other option was to wait until I filed my 2009 taxes to recieve the credit. So, I made an amendment to my 2008 taxes and recieved my check pretty quickly. I got on it almost as soon as they announced the availability of the 2009 $8,000 credit. if you go back in these posts you can see my earlier comments about the credit. somewhere around february thru may and then scattered through out up to now.
Heather & Des,
Yes you both should be able to claim the 2008 $7,500 “loan” as long as you were first-time homebuyers. the $7,500 “loan” for 2008 is to be paid back over the course of 15 years at $500 a year interest free. If you had purchased during 2009 you would have qualified for the $8,000 credit that does not have to be paid back as long as the house remains your primary residence for no less than 3 years.
If I bought a house in July of 08, took the 7500 credit, was there ever an amendment that says I qualify for the 8000 credit and do not have to pay it back?
I bought a home in may 2008 but did not apply for the credit. Can i now apply for it on my 2009 return (as a loan) first time homebuyers credit. or do i need to amend my 2008 return?
If I bought a home with my boyfriend, who previously owned a home but I am a first time buyer, in September of 2008, and did not know I could take advantage of the tax credit, could I still take advantage of it? And if I can, would I qualify since we got married after the house was purchased? I hope that makes sense!
so my boyfriendand i are looking into buying our first home. The only problem is that for the 2008-2009 tax year i am claimed by my parents. If we buy a house on january 1 2010 are we eligable for the tax cradit? also i am not real clear onthe income stipulations. someone said there is a limitaion?
To qualify regarding home owner ship.Say you had a trailer in 07 for 2weeks and sold it but was not your primary residence for 3 yrs do you qualify?
Check out this story about the extension of the housing tax credit:
http://abclocal.go.com/wabc/story?section=news/politics&id=7087955
If you want to skip it, here’s the interesting part (which they do not explain in detail):
1,400,000 homebuyers have taken advantage of the tax credit.
The story specifically states that NAR estimates that 350,000 of those wouldn’t have purchased without the tax credit, meaning 1,050,000 would still have purchased without the tax credit.
This means the total cost of the program breaks down like this:
1,400,000 x 8,000 = $11,200,000,000 (11.2 BILLION)
This means the total cost to give the 350,000 people who wouldn’t have purchased a home without the tax credit was the 11.2 Billion; which means:
11,200,000,000 / 350,000 = $32,000 per transaction
So:
It cost $32,000 for each individual who got the $8,000 tax credit, to motivate them to purchase a new home.
Wow.
When will we know if the first time home buyer credit has been extended? Obama voted yes to extend the deadline to April 30th, 2010, but would allow homebuyers until June 30th to close on a home. Does anyone have more info about this, or when we will know if this will happen?
Marisol,
no, the home must be your primary residence for the first three years of ownership or else you would be required to pay back the credit.
I am living in Nothern Ca, and want to purchase a home in the Southern Ca and rent it for two years and then move in as my primary residence, I’m I still qualify for the 8000 credit? This is my first home.
no, you are correct… You only have to “Close” on the home. You dont have to actually be moved. any arrangements the two of you make beyond the actual closing date have no bearing.
I understand that the purchase has to be made by November 30 to be eligible for the $8000 credit. I assume that means you have to close (and therefore OWN the home) by that date. Does it mean that you have to actually, physically MOVE into the home to be eligible for the credit? For example, buyer is pressuring me to “move out” of the home I’m selling to her, by the 30th. But I may need a couple of weeks beyond the 30th, until MY new place is ready. Can’t we arrange for me to stay in my old home for a week or two (and pay rent to the new owner if necessary) and the new owner STILL qualify for the 8K credit?
Jennifer,
A “trailer” is still a home. It was your primary residence too I would assume. The answer to your question is no.
2008 Purchaser,
No, if you bought or built a home in 2008 and recieved the $7,500 interest free tax loan then no you cannot do an ammended return and also get the $8,000 credit. the $8,000 credit is for purchases made during the 2009 calendar year.
I still have not read a clear answer to this question. If I purchased my home in 2008 and received the $7500 tax credit that has to be paid back, with the new tax credit in place can i amend my 2008 tax and apply for the $8000 tax credit. If so when should I have done so.
Is congress working on a bill to pass before November 30, that will help anyone who building a new house to get the 8000 credit even, if the persons owned a trailer before buying or building a new house?
If you buy and install a tankless waterheater it qualifies for a tax credit.
Nickel,
We closed on our home June 26th of this year. Surprisingly we got our $8000 check only 9 weeks later. Is there anymore tax credit, us as 1st time home buyers can take advantage of?
thanks,
Chris
QUESTION ? WHAT HAPPENS IF YOU ARE ABOUT TO
CLOSE ON OCT.2, 2009 AND YOU DO NOT FILE
TAXES BECAUSE YOU ARE ON SOCIAL SECURITY?
WHAT HAPPENS WITH THE $8000 CREDIT, DO WE GET A REFUND?
THANKS,
JUDY JOHNS-MEEKS
Well, it has been 6 months now since I sent in the amended return to claim the 8,000 homebuyer credit. The first 3 months the IRS did nothing. Then I called to check on the status and the next week they sent me a letter requesting the settlement statement. Then another 2 1/2 months went by and I called again to check on the status. The lady on the phone said that the settlement statement that I sent in on July 9 had not been reviewed yet. Then guess what a week later I receive a letter asking for 3 utility bills, a property tax statement and the deed. So it may be Christmas before we see the credit. My hopes are pretty low. So if I was going to apply for the tax credit NOW I would send all of the documents in with the Amended return right away.
hi! My boyfriend and I are in the midst of purchasing a home. We are not married. I do not qualify as an individual but he does income wise. As a couple we do. Is there anything specific I should be doing to make sure our tax credit goes smoothly?
Quick question:
I’ve checked with numerous sources ranging from the IRS to blogs- and haven’t been able to find an answer.
The question seems rather straightforward (but I want to make sure I don’t violate any codes/laws): After purchasing a 2 bedroom home, can I have a room-mate that contributes half of my mortgage? OR, will I be violating the “non-rental” clause? Albeit, I will plan to live there as well, as my primary residence for three years.
Thanks much in advance!
Sach
Is it just me, or does anyone else who is on this blog live in area where your income is legitimately higher due to cost of living, and therefore you don’t qualify for this tax credit? And I don’t mean I don’t qualify because I make $40-50k more than the income level allows, I am talking on the border.
If I held the same position I currently have in another state, say Iowa, I would more than qualify for the tax credit.
This doesn’t seem fair. Cost of living is extremely higher where I live, and cost of housing even more so. I gaurantee I paid more for my house, based on sf and location than anyone would in another state.
Anyone know where I can file a complaint with the govt?
Paula, I sent the contract and the settlement statement. Sent it off May 15th or may 18th right before closing to IRS and received the check in the mail by, July 6th deposited in the bank.
I was just thinking, you may need to make sure that they have not mailed the check to your old address, even though you have purchased a home, your address is NOT automatically updated! You are supposed to fill the address change form out from the IRS which is separate and mail it in. I do know that if they did mail it to your old address they won’t call or let you know it was returned unless you call them and inquire (US postal service does NOT forward US Treasury checks. So, also remember to update your address with IRS. I called so much that they updated my address over the phone, because it would have taken forever to send the form in; im sure the check and my address change would have gotten criss-crossed in the mail.
Jacinta – how long did it take for you to get the 8k after you amended your return? The IRS received my amended return on April 3 and I’m still waiting. Just curious. Did you send in your settlement statement?
Belinda you would be able to receive through rapid refund unless you had some issues when you filed last year, that could delay your return. I amended my return and received the 8k, you will receive it you just can’t really pinpoint the exact week until it has been processed. As long as you meet all requires meant you should definitely receive without a doubt. good luck.
you cant get the money china until you buy a house and go for settlement on it and yes it does work for mobile homes..it states its anything that is your prime residence. condos,mobile homes,modulars,houses and trailers..and you get up to 8k back for a cash refund on your 2009 tax returns when you file in 2010.you can ammend your 2008 but i dont reccommend it. but the 8k or 10% of the value of the home is a cash refund from the goverment stimulus package.the other thing i can tell you is you need to settle on a house before dec 1,2009.thats when this is all over as far as we know..it may be extended but dont count on that..
how do i get the money to buy a new home and does it work for mobile homes
and also what kind of documents that is required to send in with your tax return for proof of your purchase,,the deed or the settlement papers so i can avoid being sent back the tax forms and kill that bird before it gets started
my question is…..if and when someone buys a house, which i am in the process of doing,can you get a rapid refund against the amount you are getting back or at least part of it…im signing a promisary note to give some of the money to my seller for the closing costs and if you all are having such a hard time getting the money that mr obama promised us all then how long is it really gonna take next year as well? cause im only gonna have a limited time to get this money to them..can someone provide me some answers on that..that is something i cant find research for.
the tax credit as far as todays news will be dismissed as of dec 1,2009.you have to be closed or settled on your house on or before that date.in my oppinion i do believe that they will wait till the last minute to extend this stimulus due to the housing market sales rising. i have done some research on this and found out that if they would extend it it wont be until the last minute cause they dont want people to wait to buy..but then again you have to keep in mind that cash for clunkers was suppose to be longer than 5mnths going..if the money isnt there then it will end.it all depends
this comment is for catherine and about the 8k if you move…the information i can tell you is the 8k doesnt have to be paid back as long as you live in the house for 3yrs or more..now i dont know if there is aloop whole when it has to do with your husband being in the military and he gets orders…that is something you will have to check on.but if you move and rent the house its still not your primary residence so im not really sure how that would work.i was told if you you rent it out its called an investment and you would have to pay it back but i could be wrong..good luck
We bought our house March 30, 2009 and filed an amended return on March 31. IRS received it on April 3. Three months later I received a letter asking for additional documentation – they wanted a copy of the Settlement statement – with all signatures. So I sent this to them – mid July. At the beginning of Aug. I received a letter stating they would let me know something by Sept. 22. So I am going on 5 months now from the time they first received my amended return. Makes you wonder…
I sent my ammended return in july 6th and called irs sept. 3 and asked them if my 8000 had been processed and i was told it was delayed and i would be recieving something in the mail where they would need additional documentation???? anyone know what this could be about or anyone else had this happen? only thing i’ve came up with is that the house i bought was the first house on a new street in this sub-divison and its not showing up on maps or nothing but i get my mail there i dont understand can anyone help me????
what if I start the home buying process on Nov. 20, 09 and it will not close until Dec. 20, 09 will I still be eligible for the $8k credit?
My Husband is in the Army and we are closing on our first house September 3, 2009. I’m wondering what happens if he gets orders and we move, will we have to repay the tax credit if it we rent it out while we are living in another state? We plan to come back to this house after he is out of the military.
I live with relatives and they acquired a quit claim deed in my name to avoid probate if something happens to them. Somehow, during the transaction someone at the bank put my name on the title/tax statements, although my name is not on the mortgage and I do not own the home. Will I have a problem qualifying for the first time home buyer tax credit?
To Everyone on this site and others you know wanting to claim this credit. Read this article. Tax Fraud is tax fraud no matter how you look at it and its no joke.
http://www.irs.gov/newsroom/article/0,,id=211399,00.html
If you have serious legitimate questions and can’t find the answer yourself call the IRS and ask them.
Michelle,
You need to call the IRS and ask them this question. They will answer it honestly. They are actually very helpful.
Michael T.,
This is quoted from the 5405 Form from the IRS website “If you constructed your main home, you are treated as having purchased it on the date you first occupied it.” that should answer your question. If not Then You shold call the IRS as well.
i’m so confused. even my mom is confused and she worked for IRS for 35 years. you seem to know whats going on so maybe you can help because i’ve seen different answers in different places.
my husband and i purchesed our first home sept 30, 2008. we filed, and got our $7500 “credit” (that we have to pay back). i have been told that we can refile an amended return and somehow switch to the $8000 that we dont have to pay back.
i cannot find anything on IRS’s site tho so i do not know if this is true.
can someone PLEASE let me know if i’m wasting my time trying to do this? yeah it would be nice to not have to repay the $7500 but either way i guess we won.
I am working on building a house in South Carolina. Though ground has not yet been broken on this new house, the builder has assured us that he only needs about three months to build the house. I have advised the builder that we would like to be able to close on the house prior to November 30th, so as to get a check for $8,000 as a first time homebuyer. In the event that the house is not closed on before November 30th, would I still qualify for the $8,000. I signed a contract on the house on July 21st.
Thank You,
Michael T.
Summerville, SC
Yeah they are usually helpful. Just be calm and don’t boast at them or they won’t help at all. Otherwise they will work with you and get you what is rightfully yours or tell you why it isn’t, lol!
Thomas, thanks for your response. In going back through my return I found that the IRS recalculated our 2008 tax but included our capital gains in taxable income when the should have been excluded. Atleast I know where they messed up when I call back. Hope I get someone who can help when I call.
The $8,000 credit can be reduced if you owe taxes, jugements, or any other dollar amount that is attainable by the IRS and if while ammending your tax return something caused your 2008 taxes to increase then the $8,000 would be reduced by that amount. It’s a bummer if you did have $2,483 in back taxes to pay. Hopefully this is an error on their part. The IRS is not perfect like they would like to think they are… Hope you get that other $2500!!
We closed on our first house 5/20/09 and filed our 1040X on 5/21/09. We received our refund from the IRS on 7/13/09, however it was for $5517 instead of the $8k we were supposed to get. We received a letter from the IRS today indicating that they changed our 2008 return but that it resulted in an increase of tax. I thought this was a refundable credit and thus there shouldn’t be an increase in tax. Any thoughts on this? We contacted the IRS and they have “opened the file and are looking into it.” Anyone else had a problem not getting back the full amount?
Cindy,
They don’t even need your word…. If you’ve already bought your house then they are already well aware of it for tax purposes…. Hope this helps. They know whether you own a home or not.
Hi, I just filled out my amended 1040X and attached the 5405. But aren’t they going to need more paperwork? I can’t imagine the government is just going to trust my word that I purchased a house this year. Are they going to ask me for a copy of my deed or some such???
Hello all,
I bought my home Dec 31st 2008, and qualified and received the $7500 tax credit (the one that has to be paid back).
I recently received an email for my real estate agent saying the following:
“I was in a real estate class and the instructor said that there was a change (either tax law or stimulus bill or something like that) that would allow you to amend your 2008 tax returns to change over from the $7500 credit that has to be paid back, to the new $8,000 credit that does not have to be paid back.”
Has any one else heard or seen anything about this?
Guess What?! Our check arrived in today’s mail! Praise the Lord! We put it in the bank this afternoon and mailed out some bills we had hanging over our head and now we are just about debt free other than our house and car. Boy is that a good feeling. We left the rest in the bank to add to and hopefully by fall we will have some new furniture. If they mailed it Friday, it only took two days to get here. I was stunned. I really wasn’t expecting it until Tuesday or Wednesday. Hang in there Tanya! You’ll get it soon!
Yes Mine is July 17th I called again this morning to make sure everything was still the same.
Good morning Tanya. Yeah we did call. We had received a call from an irs employee on June 22 letting us know that our info was approved and went into the computer. She told us to expect a check in 2 to 3 weeks. We reached the two week mark on July 1. No check. My husband called the irs that night a little before 10:00 and got a guy that checked into everything. He told us it would not be mailed until the 10th and that they were adding interest because it has taken so long. So today is the 10th. So we’ll see if it arrives sometime between now and the middle of next week. The guy on the phone said it could take 7-10 days for it to arrive depending on postal service.
Have you found out when your will be mailed?
Hey Alicia did you ever call back to see if they had a mailing date for you?
First Time Homebuyer Definition:
A first-time homebuyer is an individual (and the individual’s spouse, if married) who has not had an ownership interest in a principal residence (within the meaning of Section 121 of the Internal Revenue Code) during the three years before the date a new principal residence is purchased. Applying Section 121, a taxpayer can be a first-time homebuyer if the taxpayer has not owned and used a property as a principal residence at any time during the three years before the date of purchase of the new residence. Taxpayers affected by Hurricane Katrina who have owned but not used their property as a principal residence within the last three years may be eligible for the first-time homebuyer credit when they purchase a new principal residence. (05/07/09)
First-Time Homebuyer Credit Q and A: Basic Info:
http://www.irs.gov/newsroom/article/0,,id=206291,00.html
Q. I purchased a home that qualifies for the first-time homebuyer credit. I will be renting two of the bedrooms and reporting the rental income on Schedule E. Will I still qualify for the credit if I use the home as my principal residence? Yes.
Q. Would I be considered a first time homebuyer if I owned a principle residence outside of the United States within the previous three years? Yes.
Q. Is a step-relative considered a related party? No.
Q. If a person does not actually make the payments on a home that’s their primary residence, but the deed and mortgage documents are in their name, can they be considered a first-time home buyer? Yes.
No.
For 2009 Home Purchases
The American Recovery and Reinvestment Act of 2009 expanded the first-time homebuyer credit by increasing the credit amount to $8,000 for purchases made in 2009 before Dec. 1.
For home purchased in 2009, the credit does not have to be paid back unless the home ceases to be the taxpayer’s main residence within a three-year period following the purchase.
First-time homebuyers who purchase a home in 2009 can claim the credit on either a 2008 tax return, due April 15, 2009, or a 2009 tax return, due April 15, 2010. The credit may not be claimed before the closing date. But, if the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return. News release 2009-27 has more information on these options.
is the program going to be available for purchases in 2010?
My pleasure.
Thanks Rayeshon for the info!
they break each session up in steps, the first time i called it showed a date of receiving the amendment (date stamp), then i called a gain and it said processing, that’s all and the guy updated my address. called back it said credit approved 8000, called back it said check going out blah blah blah.
Definitely on June 18th, I was off that thursday and i called. she told me it was approved, and it was showing a 8,000 credit in the system, she then told me to call back in about 2 weeks and check to see if there is date in the system to be mailed out.
they explained to me that when you call you speak with a IRS rep that could be anywhere – Texas, Philadelphia, Virginia, Atlanta. What happens is, the processing center updates the system and these reps may not see for a week or two in their computer system. Just because the rep you called doesn’t see it doesn’t mean it is not processed, it just takes a while sometimes for their systems to update the info all over. That’s crazy right?
Rayeshon- When did they approve your amendment?What day, because mine was received 06/09/09 but I was told it was approved 06/26/09. I wonder if they stating 2-3 weeks from the day it was approved or received.
Yeah. Hopefully between now and next Tuesday………….
CONGRATULATIONS ALICIA!!! The wait is over
We’re 17 weeks into this. Still no check. We were told that our info finally went in the computer on June 17(they received our forms March 23) an to expect a check in 2-3 weeks. At the 2 week mark and still no check we were now told that it is being mailed July 10. That puts it at almost four weeks of being in the computer. I asked why the change in mailing times. No answer other than they were giving us $67 in interest. So Tanya we are pretty much in the same boat. I am so frustrated.
Well they make their deposits and mailings on Fridays, so you would get it on a monday or tuesday possibly a wednesday. I received mine on 5/26/09 which was a tuesday. Everyone should remember that if there are any mistakes on your ammendment form or the 5405 form and/or you owe any back taxes or any back child support any thing like that, these things will delay and/or reduce your refund amount.
I wouldn’t say that, as far as Mondays are the days for the checks to be released from the IRS. I would just say keep calling and checking often, to anyone who has not received theirs yet.
So I take it folks are receiving checks on Mondays….
Hi Tanya, I called every other week, I received interest as well $60.57; Even though they told me to wait 4 wks I called regardless. I sent mine in March, they sent it back because i missed something on my initial amendment, I held it until around May 19th, a few days before my closing, mailed it on the 19th of May, started calling about 2 wks later, and was asking about the old address being in the system. wasn’t until my 3rd time calling the next week, i got someone who updated it for me over the phone. then waited another week called back, showing in system, waited a week (she said 4 wks), gave me the date and approved amt, called next week gave me the date check would be mailed.
Bonnie I am soo sorry, maybe you could try calling that number also in regards to your Federal return, your state refund could be held for other reasons. Also, I was thinking that they may have sent your Federal check to your old address is this possible? or was your return filed with your new address?
Good Morning Jennifer , call 1-800-829-1040, press 2 for questions about your acct, press 2 for questions about your tax acct, enter ss#, and just hold (don’t press anything else);
I closed on my house 03/20/09 & I filed my amendment on 03/24/09 & I started calling on week 8 was told by some to resend it in & others to wait unil the full 12 weeks were up, because it was possible it would show in the system. YEAH Right so week 10 I was tired of hearing them say I don’t show it in the system, so I went to the Federal Building & filed June 9th & it was approved June 26 & I was given a mailing date of July 17, also $102 in intrest. This has been a long drawn out process.
BY The way yes I was in the hospital, I now have to carry an Epi-pen and have to see allergist and nutrionist etc they believe something in the house overloaded my immune system and the result was almost deadly, I need to have the house tested and treated before I can go back home, but need the money to do so.
Hi, Don’t feel so bad, I bought a home, filed my taxes in april. they asked for information from my purchase, I sent in the information(clue they could of gotten the information on line at the registry of deeds) Its now July 6th and no refund as of yet, I also filed electronically. I don’t think 1.) they have the money to pay out 2.) they are hoping I forget about my tax return, 3) they didn’t actually think someone would qualify to buy a house in this economy ( I was saving for the last 4 years after I sold my condo) 4.) the person reviewing my taxes doesn’t want to part with the money or they are trying to figure out how to scam and get the money sent to their checking account. I don’t know but I do know I have a degree in accounting (with honors), I read the qualifications and I qualify and every time I call them they give me an excuse. Now I’m very sick and could use the money to adapt the house to accomodate my disabilities and they just wont send me the money that is rightfully mine. Also Mass (where I Live cashed my check then sent me a notice that they couldn’t complete my taxes because I hadn’t fully completed my insurance info, I did complete it. they just 1.) can’t read,2.) can’t look on the back of the form to see the continuance. hello I gave them my insurance # and I have had the same insurance since 1996 blue cross blue shield, my luck I just got all the IDIOTS THIS YEAR!!!!! What the hell is happening to our country and where is my MONEY 🙁 I think they are just giving me crap and harrassing me and finding every excuse they can to make it more difficult on a me, As it is I have soooo many allergies now I have to stay away from my home because I got deathly ill when I was staying there. SO I am hoping I get the money soon to maybe help accomodate the house so I can go home. So what do you think will I ever get my money? or was I suckered in and left to the sharks?
anyone heard that this program is going to be extended
anyone heaqrd if this incentive is going to be available for purchases in 2010. I’m holdinf off buying because I don’t qualify to puyrchase in 2009 ..HELP!!!!
Thomas
If you don’t make any money off your home, you don’t have to pay back the 7500. I’m I correct on this?
Larry
To answer the question about the “3 years to qualify”… What that means is you cant have owned a home within 3 years of purchasing your new home to be considered a first-time home buyer. What that means is you can’t own a home or be paying a mortgage on a home or have co-signed on a home during the past three years. Which inturn means you would have to either be renting or living with someone else for the past three years in order to qualify as a First Time Home Buyer… Aslo, No you are not eligible for the tax credit if you bought in 2007. You have to purchase in 2009 for the $8000 tax credit that doesnt have to be repayed as long as it remains your primary residence for 3 years. If you purchased in 2008 you are eligible for the $7500 tax “Loan” that is repayable at a rate of $500 a year for 15 years. It is a zero interest loan and is paid when you file your taxes each year.
To be clear here, the 2008 “$7500” tax “loan” has to be repaid and the 2009 “$8000” tax “credit” does not have to be repaid as long as it remains your primary residence for at least 3 years.
Two questions –
Still waiting for a posting regarding the 3 year to qualify. is it 3 years?
Also, I have heard a rumor that this program will be extended to purchases made in 2010.
Does anyon have any info on this two issues
Two questions –
If I purchased a home in 2007, is it true I’m not elibible. I see on this site, someone mentioned two (2) years NOT three (3) to qualify.
Also, I have heard a rumor that this program will be extended to purchases made in 2010.
Does anyon have any info on this two issues
What number do you call to find out if your amended return was approved? It seems like every number I try I get an automated response. I would like to talk to someone to make sure they have it and see if it has been approved??
I received my check too today! I also kept calling and checking up, they told me it would be mailed on last friday 7-3-09, since I amended they would have sent the check to my old address; I kept calling IRS and I got a nice operator that changed the address while I was on hold instead of me having to fill out the change of address form.
Congratulations Samantha… Spend it merrily!!!!
Recieved my check today!
I sold my house November 15, 2007, after my divorce. I’ve been told the time frame is now 2 years not 3 of not owning a home. If it is 2 years then I would have to close on a new home between November 16, 2009 and November 30, 2009. Can anyone verify this?
Alicia.. Im sorry to hear about that! I sent my form May 31, and I called the IRS yesterday and they said that my papers have been recieved and they would be mailing it out between july 6-8. I hope they mean what they say!
your eligible for the $7500 credit that has to be repaid at a rate of $500 a year at tax time.
15 weeks and still no check! We have made several calls to the IRS and we finally found out that our form was processed and put in the computer the middle of June. We were told we would receive our check in 2-3 weeks. Yesterday we hit the 2-3 week mark and still no check so we called last night just to make sure everything was still in the works. Now we were told that our check would not be mailed until the second week in July. This is insane! The only thing good about it is that they have added some interest to it because it is taking so long to get us our money!!!
we closed in November, our first payment was due January 1 2009, do i still qualify?
Just wanted to add my “two cents”. We purchased our first home on April 13th, mailed my 1040X on April 16th with the correct form. We had already filed our 2008 taxes so I had to do the 1040X which is very simple to do. Called the IRS a few weeks after that and was told that it was received on April 19th. Called today and was told that it was approved on June 13 and I should expect a check in the next 3 to 4 weeks. I was also told that I could call back next Friday (the 26th) and they might have a date that the check will be mailed. The reps I have spoken with have been very nice. I usually have to wait about 20 – 25 minutes to talk to anyone so I usually grab a magazine to look at while I’m waiting. Still don’t know when I will actually receive the money but it will be nice when it gets here!
If I owned a mobile home on a rented lot in the past 3 years as a principle residence, does that disqualify me from the first time home buyter tax credit?
HHhmmm. $15,000 was what Obama originally wanted to give to home buyers but it was toned down to $8,000. And gee, they are having a hard time even getting that out to people. (other than Thomas:)I hope your wedding goes beautifully. Many blessings to you and your future wife.) I am on my 14th week waiting-still no check today. I am on my knees praying to the Lord that it arrives before the weekend. I have things I need to purchase for our new home, bills to pay off and a pantry to stock. So, I hope the Government watches how far they get in over their heads with extensions and things if they can’t even keep up with what they have going on now.
Hello all! I’m curious if anyone else has herd about a possible extension to this? Word of mouth says that there is a bill out for an extension and that this would also give home buyers more that $8,000 when they buy a house….. My understanding is that it’s going to be around $15,000. Any leads?
I’ve been trying to buy a house now for 2 months and haven’t gotten one yet. It’s a lot harder than I thought it would be even after we got financed. We’ve been out bid on 3 houses already and have been looking for over 2 months now. We are hoping to get the tax credit, but if we don’t find one soon than we feel we might miss out. Also, we are waiting to hear if and when they set up a bridge loan for the tax credit in California. I’ve heard some states have already put things in place to help get the money sooner, but doesn’t seem like CA is on board yet. Has anyone heard if and when California will have something in place?
I just heard that there was a new change to this Tax Credit in that you can claim it and use it for an additional down-payment or closing costs. I need to confirm this but just putting the bug in your ears. I’ll post again later when I find out for sure. Anyone else heard this new change?
What if you want to purchase a condo that is fannie mae non-warrantable, do you still qualify for the tax credit?
Samantha,
Ok, if you have a copy and they need an original signed copy, then just reprint the forms off of their website and fill them out again using your copies and resend them. but don’t do it unless they ask for it. Also if you just sent it in on the 31st of may then expect to wait another 5 to 8 weeks.
yes i made a copy and sent it to them on the 31st of May
Alicia,
Have no fear im sure it is on its way…
Samantha,
Sorry about your experience with your tax preparer, but you need to remember that “You” are supposed to send in your ammended tax return. The preparer should have known that… Did you make a copy of the copy you sent to the IRS?
No.. they kept the originals and gave me the copy saying they would send it for me and never did.. so i sent in a copy that they gave me. i called the irs and they said that they needed one with the original signature. They said if anything they would notify me and send me a piece of paper to sign. i have a funny feeling about the tax preparer that all..
Thomas,
Thanks for your response. No we do not owe any taxes. We had already files and received our 2008 taxes in February. That was how we paid for closing costs. When we called the IRS about a month and a half ago we were in their “inventory”. I called last Thursday June 4th and it was being “processed”. Not sure what that means but they said give it until the 22nd and if we haven’t received it by then call back. UGH! I am praying very diligently that it comes this week! I need to purchase a lawnmower!
Samantha,
Are you saying that the Tax place filled out your ammended return for you and they gave you a copy of it to mail in? If that is the case then I would say it’s fine. there should be 3 copies at least anyways, your copy, the tax professionals copy and the IRS’ copy… I think your ok… But in the future you need to get better contact information and originals from your tax preparer for your records.
i do not have the originals the tax preperation place does and they are seasonal so they are closed and i have no way to contact anyone.
Sorry, ive been away on business the last couple of days.
ALICIA, I’m not sure why I received mine before you but you may want to consider whether or not you owed any taxes or if you made any mistakes on your amendment stuff like that… Hope you recieve your check soon.
SAMANTHA, You dont need to send a copy of your original return in with your ammended one. For you to claim the $8,000 tax credit after you have filed you simply need to print out and fill out the 1040X and 5405 forms and send those in only. That is all I did and I received mine within 7 weeks.
REBECCA, I don’t think you have to take out a mortgage to recieve the credit. It’s simply, If you buy a house within the window given by the IRS “If you are choosing to claim the credit on your 2008 return for a main home bought after December 31, 2008, and before December 1, 2009”. Also I think if there is a mortgage and you are not a co-signer or have no vested interest in the house then you are not eligible for the credit but the borrower is.
SARA, Here I am, LoL oh yeah i’m enjoying my $8,000 stimulus dollars.
damn wheres Thomas?? he got his money now hes MIA
Does anyone know if you have to take out a mortage in order to qualify. What if you pay cash? Or what if you are just on the title but are not on the mortgage?
I sent my amended paper work yesterday.. May 30th so Im hoping it comes soon.. does anybody know if I can send a Copy of the paper work instead of the orignals because the tax prep. place kept them. Well Im Keeping my Fingers crossed!! =)
the problem with people like mary is its all about me,me,me!what happened to this country(united states of america)
Wow Thomas I wonder how you received your $8 check so fast. The IRS received my amended return on March 23. It’s May 30th…still no check…………
I don’t remember seeing that on the amendment. thank you for your response.
The form asks if you want the address changed and it came straight to my new address.
Hi Thomas, it’s great that you received your check so quickly! Did they send it directly to your new home? or did you have to submit a change of address (irs form)? I am wondering whether they will send the check to the address on the last return or not, i amended my taxes.
look on this page to find the correct filing address for your state.
http://www.irs.gov/file/article/0,,id=109750,00.html
does anybody know the address to send the 1040x form to mail in papers to the irs?
I ammended my taxes at the beginning of April for the tax credit and recieved my $8k check yesterday in the mail. I said I would post as soon as I recieved it. I mailed out the return on 4/7/09 and recieved the check on 5/26/09.
Something people forget is that if you are PLANNING on buying a house but don’t have enough for a down payment, what you can do claim the tax credit IN ADVANCE by filling out a new W2 tax withholding form and give it to your employer.
You will then pay $0 in tax on every paycheck until you hit the $8000. Then when April 2010 hits, you just claim the $8000 tax credit.
Otherwise you need to come up with the money first then buy the house then get a check in the mail.
This way you get the money upfront and you buy the house.
Of course, if you don’t buy the house the IRS for any reason the IRS is going to hit you with a huge fine for not withholding the proper amount of tax and you will need to pay back the $8000+penalties.
I am trying to determine if my spouse and I should buy a home this year, or wait to save more for a down payment and buy in 2010. Does anyone have an educated prediction as to whether the $8,000 tax credit may extend into 2010? We currently rent, and only have about 10K saved for a down payment. We make a total of about $65K/year (with the strong chance that one of us will receive a promotion within the year). I don’t know if we should continue to throw money away on renting or if we should take advantage of the tax credit that could increase our down payment on a house. Any advice? Buy now with the tax credit or wait and save for a bigger down payment to purchase a home in the next year or two?
I am married. Both me and my wife are first time home buyers and looking to buy a condo with my parents help. My dad is not a first time home-buyer and he will pay the down payment. So basically, would i qualify to receive the credit if both my name and my dad’s is on the title?
Patrick: Did you want some cheese with that WHINE?
Lol
It is what it is. I’m sure a lot of people that have owned a home in the last 3 years and are looking to buy now would agree with you. I’m also sure that a lot of people prob agree that owning a house in the last 12 months means you are nowhere near a new home buyer and don’t need the credit.
No reasoning behind it really that I can see but congress probably wanted everyone to have a ONCE in a lifetime opportunity of getting help to buy a house.
Thomas:
As you say in 288: “the market needs more home owners not the same ones that are there now.”
I couldnt agree more. So you agree with me, then, that anyone paying rent (i.e. a renter) at their current PRIMARY residence should have been included in this Bill, not just those who have paid rent for their PRIMARY residence the last 36 months? Good, at least we’ve got that cleared up. I’m well aware I cant’ change the facts as to who qualifies and who doesn’t — as I said, I JUST learned about this. I can still be miffed at the illogical thought process that brought about this limitation. And it sounds as if we agree.
Is there anyway to get the $8,000 tax credit as a bridge loan or up front???
LoL, and I would like to thank you all for helping to pay for some of my wedding.
To all you people who are mad about the $8k, I would just like to thank you for the new sectional couch and dinning room set!!!
Joe tells Max work harder and you make same amount of money.
Lol,
Joe tells Max work harder and you make more money.
LoL,
“Here’s the real story:
Maxwell makes $25,000 a year and pays 15% in taxes or $3750.
JoeBlow makes $150,000 and pays 35% in taxes or $52,500 in taxes.”
Maxwell has $21,250 to bring home and survive on and Joeblow has $97,500 to some how survive on. Poor Joe…
Here’s the real story:
Maxwell makes $25,000 a year and pays 15% in taxes or $3750.
JoeBlow makes $150,000 and pays 35% in taxes or $52,500 in taxes.
So JoeBlow pays more 14x real money AND pays higher percentage.
When you own a company stock if you own 14x more shares then you get 14x more voting power.
In the US, Maxwell and JoeBlow both get 1 equal vote.
Both Maxwell and Joeblow kids go to the same school.
Does JoeBlow’s kid get better treatment? No.
Does JoeBlow get special treatment at the DMV for which he is paying 14x more money to than Maxwell? No.
Does JoeBlow get anything from the government more than Maxwell? No.
When you go to the store, if they charge you more depending on who you are for the same product do you think that’s fair?
Maxwell has 100 friends that make the same amount as he does.
Joeblow has 2 friends that make the same amount.
All 101 of maxwell and his friends vote that Joeblow and his 2 friends should give them some money.
Maxwell works 7 hours a week and JoeBlow works 100hr. JoeBlow says f-this I’m not working this hard and giving all money away. So JoeBlow decides to work only 7hrs a week. Not only that but Maxwell works for JoeBlow so JoeBlow also fires maxwell.
Sad but that’s how the economy works. All the freeloaders want free money instead of just working for it.
but quite frankly im tired of argueing about why and to whom the credit is available. I only want to offer information from what I have learned about being able to aquire the tax credit in hopes of helping people. It’s getting really old to have to read through the rants on this forum about to whom the tax credit can go to. If your making over 150k a year you shouldnt be that upset over 8k any ways unless your living above your means. The majority of Americans are living decent lives with 30k-40k a year and for them to hear about someone’s sob story about they can’t get this tax credit and that they are making 3-4 times more a year is just rediculous. Thats also why our system classifies tax payers as Low-income, Moderate-income and so on. each group has to pay a certain amount taxes for everything to work the way it works. If joeblow makes $25,000 a year and pay $3,500 a year intaxes and then Maxwell is given $150,000 a year and has to pay $3,500 a year in taxes then thats not very fair to joeblow because he had to pay 14% of his salary in taxes and Maxwell only paid 2% of his salary in taxes. thats all im argueing about this. If there is anyone that actually wants some help with acquiring the tax credit and I can help give advice then i’m happy to help.
uh yeah, “getting the glut of homes of the market” = new home owners, not the same home owners who are foreclosing and buying and selling. there needs to be more new home owners. if they gave the credit to anyone who buys a home then it would only be at best a parallel move and would do nothing for the housing market. It would however do alot for the standard economy, because more people would have the money in hand to go “buy buy buy” stuff.. Sorry that you just mis-read my last post but it was meant to say that the market needs more home owners not the same ones that are there now.
Thomas:
In 286 I suggest you are ‘misremembering’ things. Your saying the ‘why’ that the Obama admin created this tax credit is as phony as saying the ‘why’ the Bush admin sent troops to Iraq (there, I picked on both parties). Revisionist history is bunk. The stated purpose was to alleviate pressures from the bourgeoning housing stock thanks to foreclosures, underwater mortgages, etc. and to try to save home values for those who aren’t willing to walk away. At no time was the interest of people who DIDN’T live in homes, but rather the homes (as chattels) themselves. The tax credit was NOT originally designed to distinguish one set of renters from another (those who have rented 3+ years vs. all others). In fact the House’s re-writing of the Bill to add the LIMITING language can be used as Exhibit ‘A’.
Bottom Line: I think you’ve misremembered. Further, no one has explained why one set of renters should be treated differently, so long as the purchase is for their ‘primary residence’. Please someone explain that logic, vis-a-vis getting the glut of homes off the market (which was the REAL reason this Bill was pushed).
The tax credit was designed to bring “New” home buyers blood into the market so that the number of home owners can go up not parallel. That is why they set the definition of a “new home buyer” to be one who has not owned a home in more than three years.
The way I see it is congress is doing damage control. If they gave away the benefit to everyone then they would pay out a lot more $8000 than if they limited to a particular group.
It’s all about PR. Can’t make everyone happy so what’s the cheapest way to make themselves look good? That’s the road they take.
It’s the same thing with taxes, why do you pay more percentage of taxes the more money you make? You get the same benefits as everyone else you should pay the same thing as a flat rate.
Not only that but but 1 man 1 vote. But 99% of all the tax revenue comes from the top 5% of the population. Then you get the extra kick in the balls that you don’t get the tax cut because you make over $150k. So all the poor people (95% majority) vote that the harder working/smarter rich people (5% minority but pay 99% of taxes) should pay them some handouts.
Oh well that’s just how things work so accept it.
Well, I JUST learned of the $8000 credit for ‘first-time home buyers’ from a Bill that, as I understand it, was supposed to ‘stimulate the economy’ by getting a chunk of the foreclosed homes off the market, helping to prop up existing home values, etc etc.
Then I read the definition of ‘first-time home buyer’ and I’m outraged. Why in the HELL is it limited to people who haven’t bought/sold a home in the past 3 years? How about the rest of us ready and able to stimulate the economy? Why on earth would anyone (esp Congress) give a rat’s ass who is purchasing these homes, so long as they are owned by people making them thier main residence? If nothing else, why not allow ALL RENTERS to reap the benefits? Why are some renters treated differently than other renters? Talk about B.S. — (equal protection…hello?)
Anyway, rant over, kinda. Well, no it’s not. I am beyond miffed. Some here talk about people losing their homes and/or being rewarded for past bad behavior. OK, I’ll buy that.
Now try this on for size: My ex-wife and I sold our house in Aug 08, and paid off our 30-year loan like normal human beings, pursuant to contract. We basically broke even before further market collapse, and got $0 in our pockets at closing, but we saved our credit….after all we were the ONE loan that Wells Fargo actually didn’t foreclose on. And my just reward? I move to another state for a new job, have a 12-month lease, which ends in Aug 09, and should I want to re-enter the housing market (despite my 730 credit score, I’d have to go FHA cuz only currently have about 5% to put down) I watch those around me get $8000 while a proper homeowner with a history of paying my mortgage to conclusion, gets screwed. What BS. Hey Congress, I’M RENTING TOO. It’s either FHA or a Rural Development Loan for me, so it seems. I am not alone in this set of facts….I just don’t understand why ANYONE renting shouldn’t be allowed to help take the glut of homes off the market, which I thought was THE POINT of all this. Anyone trying to argue the merits of this distinction are without reasoning skills — which is why we sent them to Washington DC.
Did I say ‘What BS’? Good.
Patrick
PS: And the only reason I was on the mortgage was cuz of a 2003 re-fi. I wasn’t even on the original purchase documents. So my ‘sale’ was cuz I added my name on the re-fi. what luck.
Heather,
sounds like your in a bit of a pickle… I believe I would check your credit report as well!
Tami,
As far as how much you would get back, it’s all dependent on how much you owe the IRS. If you owe them $10,000 then it would be reduced by the $8,000 and you would only recieve $2,000 but if you owe them $2,500 then you would recieve $5,500.
My husband and I have rented for several years so I know we could qualify for the $8K but I’m wondering if we owe the IRS if we would be able to get it or not.
i did call the IRS and they said that usually the forms take up to 90 days to be assigned to someone. and since ive filed on 4-16-09 it would not be in the system yet. Its crazy because they also told me that someone tried to send something electronically using my ssn on may 6 and i have no idea what it could be..
Oh yeah, Keep us posted…. this is a good one!
Heather, If I were you I would contact the IRS and tell them that you had found out they were raided/audited and that you had used them for your tax services and that they had confronted you about the same issue of wanting part of your tax credit as well and find out if you are infact a victom… If the IRS did in fact “Come to visit” then they will be able to look something up for you…
Ha that’s pretty funny that they got raided. Lesson learned: fill out your own forms next time.
The place where i filed my forms to recieve the rebate got raided by the IRS for stealing peoples money. So Im wondering.. How do I find out if I was a victim?
Nick,
i’ll start by assuming that you’ve filed your taxes and havent filed an extension. with that being said, if you want to claim the $8000 tax credit for your ’08 tax year then you do have to ammend your taxes by filing out a 1040-x and the 5405 form, both of which can be printed from the IRS website. I filled out the 1040-x form myself and the 5405 and mailed them in. An ammended return takes 8-12 weeks. Otherwise, you will have to wait until 2010 when you file your ’09 taxes to claim the credit.
Now, as far as if you get to claim the $7500 taxcredit that you have to pay back or the $8000 that you don’t have to repay, that is based upon when you buy the house. If you purchase the house before Dec. 30 2008 then you get to claim the $7500 credit and pay it back at a rate of $500 a year for 15 years at zero % interest which is done when you file your taxes each year. Of your purchase your home in 2009 you will get to claim the $8000 tax credit that you dont have to repay only if it remains your primary residence for a minimum of 3 years. You say that you purchased on May 28th, 2009 so you have the option to either ammend your ’08 taxes and get the $8000 credit now or you have to wait until 2010 when you file your ’09 taxes. either way as long as you purchased in 2009 you will get to claim the $8000 tax credit.
I personally did an ammended tax return for my ’08 taxes on the 3rd of April and it says that ammended returns tack upto 8-12 weeks to process. I will post as soon as I recieve mine. and by the way, I filled out the forms myself, so they arent so hard that you need a CPA to do them for you. All you need is your ’08 tax information to transpose onto the 1040-x form and then fill out the 5405 form for the credit and send only those two forms to the IRS. Goto http://www.IRS.gov and search for 1040-x and 5405 and then search for 1040-x instructions and it will tell you exactly what to do.
hello, i’m planning to purchasing my first home on May 28th, 2009 and i know that we qualify for the $8000 credit but i’m hearing mixed things between CPA’s about when i can get my $8000. i heard from one that i could amend my taxes and get the tax credit sooner. i’m not exactly how much sooner or what amending entails either. and the next cpa i spoke with was concerned that amending would put it on last years taxes, either mine or my fiances’ and result in us getting the 7500 credit which would have to be repaid. please advise. thanks
“Terry Rice”
to qualify as a “First-time†home owner, you have to have not owned a home during the last 36 months. That means you had to either be living some where for free or renting. If your married that means neither of you.
Also read the instructions for the claim form http://www.irs.gov/pub/irs-pdf/f5405.pdf
Does this tax credit of 8,000.00 only apply to those who are buying their first home? My husband and I sold our home 3 years ago and want to buy another home in 2009. This will be our 4th home bought and sold. So do we qualify for a 2009 purchase of a home. It will be the first time we are buying this house. Ha Ha!
your welcome, I hope I helped!
AWW THX THOMAS!!!
That should come straight to your house. The ammended return usually has to be mailed off by you, but in any case, it should come to your house. I’m still waiting on mine. I sent my ammended return with form 5405 on 4/3/09. I will post as soon as I get my check in hand.
I filed a amendent @ a tax place and I understand that it can take 8-12 weeks untill I recieve my check.. so My question is.. will the check get sent directly to my house or my tax office?
This is quoted straight from the 5405 form from the IRS website.
“Main home. Your main home is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence.”
Also remember you can only caim 10% of the purchase price of the home upto $8000. so, if your home costs you $60,000 you can only claim $6,000 likewise if you home costs you $160,000 you can claim the full $8,000 credit.
does this apply to the purchase of a mobile home?
Ya if you don’t know how to file it yourself then you should expect to pay for it. $1500 seems pretty steep but whatever the market will bear I guess. Anyway, there’s an easier solution, just buy turbotax and file the credit with your 2009 taxes next year. When I did it, I just clicked “yes” when they asked me if I bought a house in 2009 and it does the rest.
Heather,
First you have to buy and close on the house before you can claim the credit. Becasue its after April 15th unless you filed for an extension you must have already filed your regular taxes. So now after you close on the house you will need to fill out an ammended return which is form 1040x and fill out form 5405 to claim the credit. You can download both of these forms from the IRS website. just type in the form numbers into the search bar on the http://www.IRS.gov website and it will take you right to them. you’ll need to download the instructions for the 1040x as well. I hate to hear people treating you that way, especially someone that is supposed to be your friend. You are entitled to every cent of that money and shouldn’t have to feel guilty about not giving anyone a cut. If you feel that you can’t do this on your own after you look at the two forms. Then I would go see H&R block or a place like that where they at least have a set cost for doing your taxes and they won’t ask for a cut. Keep us informed about your progress…
No.. they asked for a cut out of the rebate.. friend of the family took me there because I was unaware that I could file the document my self and he also asked for a cut out of the money. So I am sure that it illegal so I was just asking. Also… the person that prepared the paperwork for me wanted the check to come directly to his office so that he could take the cut out himself.. in total they wanted…1,500!!!!!! But I believe the check can only come to my house. Its sad that people are trying to get over on each other this way. So if anybody has any advise please help. Im a 23 year old college student about to buy my first house and I am soo unclear about the situation!
All I’m saying is that $8000 is a lot of money. If Thomas says no you can’t deduct and I say yes you can then who are you going to want to believe?
Now if you call the IRS they will probably say something like no you can’t deduct it because they want more money. Now if you call a tax attorney he’ll probably say yes but you need to pay me some money so I will defend you if you go to court.
I really don’t care if you claim it or not and probably better if you don’t claim it because it’s my tax dollars paying for it. But if I were in your shoes, I would say, “it looks like I could claim it and $8000 is better than $4000 and $8000 is better than $0 and I’m too cheap to pay $300 to a lawyer so I’m just going to try it”.
If you want to play safe just don’t claim it and you won’t get in trouble.
Again if I were the guy at the IRS I would either tell you no you can’t deduct or go talk to a lawyer. Why would I get myself in trouble or fired by giving you wrong free advice?
ok, I believe this thread was started to help people find out if they qualify to claim the credit and if so how much and how to do it…. im not gonna just tell someone to wing it and just claim it because they want to. so have at it rick…
The IRS isn’t going to give you a binding answer. If you call someone and they say you can deduct something but it turns out that you can’t, it’s not going to help you in court without an official signed piece of paper that says George at the IRS said you could deduct it.
Furthermore if I were the guy answering the phone on the IRS, I would just tell you to no don’t deduct it and if you don’t like that answer, consult a tax attorney.
There’s a reason a guy can charge you $300 an hour to prepare your tax return. Why can’t I just call the IRS and ask them 100 questions if I can deduct this or I can deduct that? Because they’re not supposed to answer those questions that can get them in trouble.
Rick,
do you just make a habbit out of giving people “Just wing it” advice. It takes way less time and stress to find out the proper way to do something than to just do it and hope you did it right. and, in this case, what if he does qualify for $4000 of the credit but claims $8000… The IRS is just going to send all of his paperwork back to him and tell him to redo it. I’ve called the IRS on several occassions to get real tax advice and they are super easy to talk to. Just call them, its that easy….
oh come on, dont just do this willie nillie…. thats how people end up in bad financial situations in the first place.. Just call the IRS and ask them how to handle it. Would you rather make a 5 minute phone call to the IRS and find out the proper way to do it and not have to worry if your falsely claiming something or would you rather make a false claim because you didnt know any better.
Mark,
This is the closest scenario to yours that I could find in the FAQ section on the IRS.gov website. I think if I were you I would call the IRS and them about your situation. Are the two of you buying with cash?, or is your brother co-signing or what?
S2. Taxpayer A is a single first-time home buyer. Taxpayer B (parent) cosigns for A and does not qualify. Both names are on the mortgage. Can Taxpayer A claim the credit and, if so, how much?
A. Yes. Taxpayer B is not a first-time homebuyer and cannot claim any portion of the credit, but A may claim the entire credit ($7,500 for purchase in 2008; $8,000 for purchase in 2009), if the home was purchased as Taxpayer A’s primary residence
Mark,
Not sure why you want binding legal or tax advice from people that are not experts. The free advice you get here is totally worth what you pay for it. My advice is try it – it’s $8000 after all. If they audit you (unlikely) then just pay it back and hope they don’t give you a penalty. Or you can pay $200-500 to a tax attorney and they can file it for you. If they screw up then you can sue them for giving bad advice.
Thomas,
Im going to co-own the house with my brother. I will own about 35% of the home (80K) which is all i can afford. I think that i can do it,are you sure?
Thanks
Mark, this one is very tricky but im gonna say no. I think your situation has something to do with family being involved. but if it is possible for you to claim the tax credit it will only be for half. because, a married couple filing seperately would each get half the credit. although half is still $4000 and that ain’t shabby. I would call the IRS and ask them the question. They are very helpful and easy to talk to.
Heather: I’m surprised someone would phrase it like that. It would be much safer to just charge you a prep fee (even an exorbitant one) than it would be to ask for a cut.
Heather, oh no…. That is totally not legal… I would report him to the BBB, obviously as long as he wasnt joking… you can fill out the 1040x yourself and mail it in to the IRS, you dont need a tax pro to do that. Remember, your tax forms, even if a tax professional has filled them out are still yours. They cannot deny you access to your forms. you should get a copy of them anyways when they originally filed your taxes for you. just take your copy and then download the 1040x and 5405 forms and then download the instructions for the 1040x form and it makes it pretty easy to do. I did it and I am “no” tax professional. LoL, it also sounds like we are giving this tax “professional” too much credit for being a professional. because a “Professional” wouldn’t ask the question.
quick question… is it legal for the people who filed the amendment (a tax perfessional) to ask for a cut out of the tax credit?
Hi,
I completely qualify for the 10% up to 8k on my first time home purchase. I plan on going in on a house with my brother. We will both own part of the home. My share of the house will be 80k worth. Will I still be able to get the tax refund if there are two owners on the home?
Thank you
Thomas
Thanks for the info. I thought it would be the bottom answer. Adjusted gain is subtracting the 7500.
Larry, check this
http://www.irs.gov/pub/irs-pdf/f5405.pdf
Need some clarification. If I were to sell my home with out any Capital gains after 3 years would I have to pay back the 7500 dollar credit? I aksed this question awhile back. This is what I took out from the the instructions.
The profit you receive when selling your home is less than the remaining amount you owe, the discrepancy will be forgiven. For example, if $5,000 was still owed and the sale of the home only generated $4,000 profit, then the remaining $1,000 shortfall would be forgiven and you would not have to repay the government.
If this is true, I owe nothing back to the Gov because there is little chance I will make a profit. Now is this from an adjusted value? I am getting two answers on here. The one above and the one below.
If you bought your home for 110,000 you have to subtract the 7500 to come up with a adjusted home price of 102,500. Your profit is from that point. In other words, if I sell it for 102,500, there is no pay back.
Still a little confused?
Thanks
Heather, if you filed the 5405 with your taxes then you will have the standard 10 day turn around but if you do an ammended return to file the 5405 then the Ammended return has to be mailed in and it is an 8-12 week time table per the IRS… Ammended returns have to be physically mailed in and not done electronically.
Rick, if your an honest standard “tax-paying” american that doesn’t have $80k to $200k in cash to just buy a house then your gonna have a mortgage. otherwise if you did have the $200k in cash to buy a house then chances are your salary is above the cap for the credit or $8k doesnt really mean much to you in the first place. This whole thing is aimed at normal people. and NO, someone making $200k or more a year is not a normal person, well for that matter anyone with $80k in cash is not a normal person….
but what is the diffrence if you filed it with a amendment or on your taxes when you filed? im soo confused still!
Which document that you sign is TAX related when you buy a house? It’s public record with your name but there are no documents sent to the IRS unless you have a mortgage in which case the mortgage company sends a document to the IRS showing the interest you paid. They do not require you to supply a SSN to buy a house. Many foreigners buy houses with just cash.
A motorhome or house boat is consider a primary residence if you live in it. If you paid cash for a $80,000 motorhome, you would qualify for the $8000 back with nothing sent to the IRS.
Thus I argue it is not an automatic audit. If you making under $100k you would probably get away with it because the IRS has bigger fish to fry.
Furthermore, I know several people that misstate W2 income. The IRS gets a copies of your W2s and you would think they would fry these guys but I know someone that states none of his w2 income and got away with it for 10 years so apparently they don’t check that carefully.
Again $8000 is a lot of free money to people.
i’m only saying these statements “rick’ because there will be some dillhole that will come on here and ask the question ” what if my friend just bought a house and didnt know he could claim this tax credit, so I claimed it instead, could I get away with it?” and by the way NO YOU WON’T !!!
and “rick”, this type of credit claim is an automatic flag to the IRS, so nobody would be able to get away with it. The IRS will let the person know that they have done something wrong long before they get “any” money. and, if somehow it was to happen… well, lets just say that would probably be the worst financial mistake that person will ever make. When you close on your house, part on the documents you sign is “TAX” related and IS sent to the IRS, so they are well informed on whether you have or have not actually bought a house.
ok, i should clarify… I already filed my ’08 taxes and recieved my regular tax refund before I closed on my house. therefore, after I closed on the house I then “had” to “mail” in an ammended 1040x with the 5405 form attached to be able to claim the $8000 tax credit and in this case it said it would take 8-12 weeks. Now, if people are getting them in 10 days then that may be the case as it could be 10 working days which it has not been 10 working days since I sent in my ammended 1040x and 5405. I will, of course post as soon as I recieve my check in the mail.
I did buy a new house and got 8k. It took 10 days and 10mins filling out the form on TurboTax. What I am saying is it’s pretty tempting for Joe Somebody to put “yes” and a fake address down and the IRS will send you $8000. Maybe you will go to jail if they catch you but again $8000 is a lot of money and the IRS audits less than 1% of tax returns so they probably won’t check it.
ok thank you.. very much the person that filed them told me 10 busissness days but if thats what the offical website says then thats what i should listen to..
ok, “rick”, so many things way off with what you just posted… im not even gonna go there. You need to read my 2 posts just before yours….
Heather, I’m not sure about that. I ammended my ’08 taxes to get the $8000 and mailed mine off 2 weeks ago. The IRS website says 8-12 weeks. so i guess in the end we have to wait in the upwards of 12 weeks before we can make any calls.. I was hoping to hear someone saying they recieved their check already. But, I did read on the IRS website last week that they just started processing the 5405 forms a month or so ago..
HOW LONG AFTER YOU FILE DO YOU RECIEVE YOUR CHECK IN THE MAIL?
$8000 is a lot of money and it’s refundable meaning if you were in a coma, had no job and paid $0 in tax, you would still get $8000 from the government.
I wonder how many people will file false tax returns and say they bought a house but they actually didn’t to get $8000 back. I remember before the IRS required every dependent you claim to put down the SSN, people just put down everything from their pets to their stuffed animals as dependents.
Also I bet people who bought in 2008 are pretty bitter they lost $8000 and wonder how many of them are going to pay the $7500 back.
Also to answer some others out there, to qualify as a “First-time” home owner, you have to have not owned a home during the last 36 months. That means you had to either be living some where for free or renting. If your married that means neither of you.
“nat” No, if you read my post that is just before yours, you would have been given the knowledge to go find the 5405 form and instructions. If you bought in ’08 you can claim the $7500 tax credit and have to pay it back at $500 a year at tax time. If you bought in ’09 you can claim the $8,000 tax credit that you DO NOT have to pay back unless it no longer becomes your primary residence within a 3 year period. after the three years you DO NOT have to pay back the $8,000 credit. You can only claim one of these credits depending on the year you purchased your home. You also have to close on the home first before you can claim the credit. furthermore you can either ammend your ’08 taxes and claim it now or you can wait and claim it on your ’09 taxes. Now in summation, if any of you who actually are reading this post right here right now will go to the http://www.IRS.gov website and find form 5405 and read the instructions it will tell you everything you need to do to qualify to be able to claim the credit.
I heard, that you can get $8,000 before you buy a house, and then submit a proof that you bought a house, and also you can claim the additional $7,500 first-time home buyer credit.. is it true?
thank you.
everyone should just go to the IRS.gov website and look up form 5405 and the instructions and it tells you everything you need to know. It even explains who is considered a “First-time” homebuyer.
Need some clarification. If I were to sell my home with out any Capital gains after 3 years would I have to pay back the 7500 dollar credit?
So clarification on my question on the owner occupied property. So are you saying you would get only a 1/4 of the $8000 ($2000) for a tax credit?
Hey Jason, thanks for the great response….I am still wondering however if the fact that I am on the loan and we are purchasing from “a family member” (my father) does this make her (who is not related) ineligable? Maybe you addressed the family thing but I may have missed it. Thanks!
Okay, here’s a good one…my fiance’ and I are living in a home that is owned by my father….I am not a first time buyer but she is and we’re not married yet. If we buy the home (I’m the coborrower) prior to being married and she claims the credit, does the fact that I am related to the seller have anything to do with her ability to recieve the credit? It seems that she should qualify….I hope.
Am I a “first-time homebuyer” (and hence eligible for the $8000 tax credit) if this is my first purchase but my dad is a co-purchaser (and owns his home)?
So do you know if it would qualify for the $8000?
Percent Residential Non Rental Property – Percent of the property you occupy as your primary residence. As an example if you own a four family home and occupy one of the units while renting out the other three units, then 1/4 or 25% of the building would be considered residential owner occupied property while the other 3/4 or 75% would be considered rental property. There may be alternative methods for determining this breakdown, such as by square footage rather than by dwelling units. You should determine this with your tax specialist.
Does a primary residence included a muti-family if it is going to be owner occupied?
perhaps this is the answer to my question, thought I would post it in case any one else was looking…
instructions on revised form 5405 say “for more information about related persons, see Nondeductible loss in ch 2 of pub 544.” and the list there is “Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc.), and lineal descendants (children, grandchildren, etc.).” Please let me know if I read it right to assume aunts are not included. Thanks!
If I understand this correctly, my husband and I cannot purchase the home we live in from his aunt and qualify for the credit. Any idea if there is a way around it? We are currently in a rent to own situation because we weren’t able to get financing so she purchased it in her name and we make the payments. Our situation has changed in the 4 years we have lived here and are wanting to put the home in our names. Would we be able to put it in only mine and receive the credit or would it still be disallowed because I am married to her nephew?
I have a question I live with my husband he owns a house i live in ny my name is not on the loan or the deed do i qualify for the 8000.00 credit house was his before we married. I would like to get my own home.
I wanna know where can i call for more info..does anyone know? Can u please place a comment with the phone number..thanxs
Rick,
I should have more specific, I apologize. My husband makes close to the limit but, I do not work as I am a full time student. We just sent off our amended taxes today and should get our check in about 6-8 weeks. I was told about the 36 month thing from my tax advisor. Let me write exactly what it says on the amended taxes…. “First time homebuyer refundable credit: You elected to claim the refundable first-time homebuyer credit which equals 10% on the purchase price of your home up to a maximum credit of $8000. The purchase price of your home gave you an estimated credit of $8000. You will not have to repay the credit unless the home is sold or ceases to be your principal residence within three years of the date of purchase.” This message is straight from the IRS themselves. Does it sound fishy to you? As far as you other comment about hte people making $30K a year and buying $400K homes are poor decision makers and have caused this mess our housing market is in. I blame the banks as well but, you know, people know what they can and cannot afford. Why would anyone set themselves up for failure? We looked at about 50 homes before I actually fell completely in love with my home and knew it was the ONE. So, my question is… if home buying is the single biggest investment a person will make in life, why screw yourself over from the get go? When those people sat down on closing day and the bank said, “Hey your loan will be $4000/ mth.” what the hell were these people thinking? Well, I don’t even make $4000 a month but what the hey, let’s do it anyway. Living a wine lifestyle on a beer pocketbook.
If your husband makes $150k and you 0 then your combined is $150k which is pretty close to the AIG limit. You probably make something more than 0 so you might not get the $8000 as you thought before.
I never heard anything about 36 good payments. That sounds fishy to me. I doubt the government would put something silly like that into law.
If your husband makes $150k a year and your house is $130k, I guess your lender has nothing to worry about.
It’s all the people that make $30k a year and buy a $400k house that makes wonder how they figure that was a good decision…
We bought our home on February 11, 2009. We had no idea about the $8000 until after we bought. My husband and I do not carry any debt other than our new home and new truck. We only have credit cards for “hurricane” season as we were devastated by Rita (2005) and Ike (2008). I have seen a lot of complaining on here about the people who “have” to repay their $7,500 from last year and this year’s buyer don’t have to repay. It is my understanding that this is to stimulate the economy. I feel for those who were offered no help and this money should have gone to help other out that may lose their homes. The fact is that we are in this position because our country thrives on credit. We all have at some point in our lives. What we do with that credit determines whether we were good candidates to accept it. People cannot always be 100% sure that they will not lose their employment as this IS a recession. You take a risk on buying anything that incurs a monthly payment that you are obligated to make. It is the people who knew that their payments or lifestyle was beyond their means that put us in this predicament (spelling, sorry.). My husband make roughly $150,000 and I am a Senior in college. We were offered a loan (in a recession) for up to $286,000. To me, that is ridiculous. We ended up buying a home for $129,900. The money ($8000) does not have to be repaid with certain stipulations. You must be in your home for 36 months with good payments (no late ones). This is what my tax advisor told me today. I know that it is “not fair” to others but, you can’t always get what you want. This is not to offend anyone. I personally think that this is a bad decision and sends a poor message in lending. People should not buy just to receive a lump sum. Our downpayment was well over the standard 3.5% and closing costs now. We are simply getting some of our money back so that we can remodel, decorate, furnish, or just spend on things we might need. Apologies to those who feel left out on the tax credit. Some of us new home buyers really do feel frustrated for you. Just keep in mind that this is intended to stimulate the economy (housing market). Hopefully for all our sake, it does just that!
God Bless.
Jason,
Thanks for taking the time to reply. A lot of good, really good news for me. No worries on popping the question. I might be nutts, but I ain’t crazy!
Thanks again.
Hi Michael.
Actually you do qualify, as long as the new house is purchased jointly, both of your name is on the title and the new house is closed on by 12-1-09 and it is your and her primary residence. You wouldnt qualify for anything but your girlfriend would qualify for the full $8,000. If you were both unmarried for the 2009 calendar year, then she would be the one receiving the $8,000 check from the IRS.
You are in a similar situation that I was in last year. I purchased a Condo in 2004 and sold in 2007. In June 2008 I purchased a home jointly with my girlfriend (both were on the title). I wasnt a first time homebuyer, she, however was. Even though we married in August 2008 and filed jointly for 2008, she was entilted to the full $7,500. We received the $7,500 credit from the IRS.
Also, I verified this is 100% accurate with a phone call to the IRS.
The law states that if 2 unmarried people purchase a home jointly, the 3 year ownership test only applies to one or the other, as long as one qualifies. So basically as long as you are unmarried another joint purchaser cannot take away your eligibility if you have never owned a home. The only way you would be disqualified is if you married prior to closing on a new home.
So to answer your question your girlfriend would qualify for the full $8,000 (as long as you are both unmarried at the time of closed before 12-1-09). I wouldnt make any plans on getting married (if you decide to purchase) until AFTER closing 🙂
Let me know if you need anymore resources to back this up, because what I have stated is 100% true and I have spent countless hours researching and commu8nicating with IRS, prior to receiving my answer.
Hope this helps you out….
*Jason
My understanding of tax exemtions definition of “first time home buyer” is – somebody who hasn’t owned a home in the last 3 years.
My dilemma is this- I currently own a home but my girlfriend hasn’t since 2005. We are looking to purchase a new home together with me selling mine.
A) Do we qualify for tax credit since she hasn’t owned in last three years?
B) Do we qualify for half ($4000) since one of us qualifies?
or
C) Are we SOL since I have owned a home in the last three years?
Please be A)
Thanks for your reply, Jason. I never thought about the apartment being in my name and rented for a sibling.
Well, I guess I could always say I commute! Just kidding but you do raise some valid points about the w2 form, Bob.
I really don’t understand the stipulation that it has to be your primary residence. It seems like the government would be happy just to see that enormous backlog of houses finally being sold.
I’d like to see how you can pull off filing w2 forms that say you work full time in Florida and claim a residence in New Mexico as your primary residence.
There are certain checks the IRS can do automatically through a computer if they have a basic programmer.
W2 income is automatically filed and sent to the IRS and they can easily check if you are cheating on your taxes. Same with 1099 income.
I might be wrong but it seems common sense to run the following checks automatically through the computer:
1) automatically check if you have claimed house interest deductions in the last 3 years. If yes -> disallow new homeowner.
2) check if w2 income is reasonably near house purchase -> if no then disallow primary residence
3) calculate AIG if > 80k then disallow credit
The IRS probably isn’t that well connected. They can’t automatically check bank accounts to see how much money you have coming in or check your credit cards to see how much you are spending without a court order.
But they can easily check their own records and you are stupid if you think they won’t.
Hi Gerald,
Your question is a tough one, but good. Since you are renting now and meet all the qualifications you qualify. I am about 99% sure if you buy a home and pay the mortgage premiums, in the IRS’s eyes the home in New Mexico would become your primary residence regardless if you lived there 1 day out of the year or 12 months. You shouldnt have to turn on the utilities, as that is irrelevant. When you buy the house, as long as you are just renting and not buying another house, there is nothing wrong with that and perfectly legal. I have done extensive research on this tax credit, however I am not a professional.
Look at it this way….as far as the IRS is concerened the apartment could be furnished for a sibling (in your name)
Hope this helps….
*Jason
Dont bother asking questions, no one is going to get back to you.
Hi, I am renting an apartment in Florida but I want to leave the area as soon as I retire (in about 11 years and I am counting the days because I hate Florida but I can’t leave my job…too good and I will receive a traditional pension too.).
I found a house in New Mexico that I wish to buy and live in after I retire. I meet all the other qualifications for receiving the $8000 tax credit except that the New Mexico house wouldn’t be my primary residence until I retire.
So my question is how is the primary residence determined? Could I get my mail forwarded to the New Mexico house, turn on the utilities and make it “appear” that I am living there?
Or is that even necessary?
Thanks.
i was just wondering how long does it actually take to recieve the tax credit after you file a tax amendment being a first time homebuyer? do you get the full tax credit being a single mom and make under $40.000 a yr. can i claim the downpayment that i put down to? or do i have to wait until the next tax year? thanks kindly. i look forward to a response
i currently own a 1/1 condo in south florida purchased in 2/06 if i purchase in dec 09 would i be eligible if i still owned the condo??
are FHA loans for 1st time buyers???
what makes it hard to get an FHA loan i have very good credit what are some reasons people get turned down
What if I own a manufactured home. Would a new home purchase qualify? or is my depeciating manufactured home consider me a home owner 🙂
Yes if you sell in less than 3 years you need to pay it back. If you sell the house for less after a few months, be prepared to lose 10-16% in closing costs to get out.
Hi,
What will happen If I buy a house and take the $8000 tax credit and after few months If I loose my job and end up selling the house for less. That time I have to pay back the entire $8000 to the government?. Please advise. Thanks.
I think the government is a bit irresponsible with encouraging people to buy houses in this market.
Some guy like T has no money down and thinks just because he is paying less with mortgage than rent that it is a good deal.
What people forget is the house value can go down. When you buy a car, you expect that the price will go down when you sell it. The house should be the same way. The cost of labor goes up over time to build a house but the techniques and materials are probably going down with more advance technology (think nail guns now vs hammer 50 years ago or prefab granite/cabinets from china). Price of land should go up in theory if the area is good but otherwise could stay the same or even go down.
Anyway, why would someone want to buy a used house when it will cost the same or less to buy a new one? So your house value should be going down.
Now say you lose your job (likely in this economy) and need to move. You probably paid 5% in fees on the house and will pay 6% to realtors and 5% to fix it up. So you are out 10-16% right off the bat.
You need 10-16% price increase in equity just to break even otherwise you need to pay 10-16% in cash to get out. You don’t have 3.5% money down for an FHA and you think the bank lending you money is a good idea?
I just bought a house but I make more in a year than I paid for my house. That’s responsible buying.
hey i may buy a house. you know what the heck. how is this credit paid. is it paid up front or over the life of the loan?????????
I’m closing on my house April 24th and qualify for the 8K. I owed taxes this year, so my question is how do I got about filing to get the 8K on my 2008 taxes? I will still need to pay and then would I get that back?
I have a question. My husband and I are looking to buy a house through an owner will carry deal. we wouldn’t actually purchase through a bank the the owner supplies the contract for us and we both sign it, including him. We then start making our payments to him rather than the bank. Can we still claim the 8000 ta credit if we do this?
I am a first time buyer about to purchase a home that will cost me less monthly than I am currently paying for rent, including the home insurance! I have no money to put down but I can afford the monthly payment. The reason for this is when I applied for a loan they took my monthly income BEFORE taxes are taken out, and 30% of that will be your payment, with this they decide how much “home” you can afford. But I know that basing what I can afford on my income before taxes are taken out is unrealistic for me because that’s not how much money I see every month. So, I had my loan amount based on the money I do see every month. That way I know exactly what Im getting into. In my opinion the reason why things got so bad is because people wanted as much home they were TOLD they could get and thus couldnt really afford what they were getting into. Im sure plenty of other factors contributed to the downfall of the economy. I just hope we all learn from our mistakes, control our money completely and help educate eachother. T
Ruben:
As long as you meet the Financial criteria and it is your first home purchase you should meet it.
Question: I’m renting a home in TX that is owned by my sister, who lives in MD and she’s planning to sell the home in TX. If I purchase this home, would I qualifty for the 2009 tax credit? Thanks in advance.
Man oh Man.
So I purchased a Home in January 09 which was covered under the $7500 April 8, 2008 and before July 1, 2009. I Filed it under my 2008 taxes before this new bill came about and already recieved the $7500. I qualify for the new $8000, is there a way I can get mine changed over?
Is there someone or someplace we can contact to talk to in person?
My husband and I are looking to sign an agreement to purchase a house through a personal buyer. Its like an owner will carry deal. can we claim the 8000 tax credit if we buy through someone and not finance through a bank?
so, is a downpayment a MUST?
so, if i buy a home for the FIRST time this year, i will get 8,000 back in taxes when i file in january 2010–is this correct?
i dont usually OWE money, so i’m assuming i’ll recieve money.
we make a total of 70,000
Neil – first of all – the $8000 credit is only for FIRST TIME HOME BUYERS. You cannot receive the credit for refinancing a home – you must BUY it. It depends on when you bought your home – if in 2008 – you have to repay – if in 2009 – you don’t have to repay.
ok we recived the 7500 dollar rebate but now that they passed the one for 8000 that you dont have to pay back is that the same as the for us do we have to pay the 7500 back. and if we refinance can we recive the 8000 one since you dont have to be a first time home buyer to recive it
Say I make $74k a year and my hubby makes $160k a year. We both never had a home before. If we buy a house in 2009 summer and file joint return, we would not qualify the $8k credit because of high AGI. However, I wonder if I could claim the $8k if we file tax return separately because my AGI is less than $75k. If so, does the home have to be under my name only?
Thanks.
Filed 2008 taxes and have already received $3,400 in refund via direct deposit.
Closed on house February 18th and purchased with my fiance.
We both filed as single (obviously) for 2008 but I make significantly more money.
Can I ammend 2008 returns, and claim head of household, and get an additional $8,000 from government? (thus giving me $11,400 in total 2008 refund – – – $3400 (original 2008 refund) + $8,000 from stimulus)????
If so, what form? and do I need to go back to my “people” at H&R Block? and do I need to bring with me only the HUD -1 for the closing?
This site is great… thanks!
I have a mobile home i bought in 2007. do i qualify for 1st time home buyer?
QUESTION:
Can I file a tax return on the 5,ooo I owe with an extension to actually pay the 5,000 I owe so that I have a bonafide full tax return to show the lender and prove my income, but I am freed from having to pay the 5000 in the meantime? This would help me with some liquidity to pay down debts and allow me to afford more house for d-to-income purposes . . . I am self-employed so completed full tax return is required with no W2.
Donna – It appears you “bought” the house from “close relatives.” Unfortunately, it appears you cannot claim the credit as you cannot buy from mother, siblings, etc. In addition, it appears that you did not “buy” the house, but inherited it. Sorry.
My question:
My mother died in Aug 2008. Her house was left to my brouther, sister and me. Since then, my brouther has swapped asessts(land) and his 1/3 has been taken off the house. My sister has just signed a quick claim deed 2 weeks ago. I own the house now. I sold my last house in Oct of 2006. Do I qualify for any of the $8,000 tax credit or does this fall under the inheritance rule. I was told I could claim 2/3 of the house.
Thanks
Hi! I am looking to buy a house in the next few months. I do not qualify for the full price of the home, thus my parents will be cosigning with me on the mortgage. My parents do own other properties. This home will be my home which I will pay for on my own and will live in. My parents are only involved so that I can get financing. Can someone tell me if I still qualify for the full $8,000. $4,000. $0. In addition, I read somewhere that I am fine if their names are not on the deed, but do not know if that is true or not. One last thing, if I close after April 15th, 2009, can I still get this money this year, or do I need to wait until next. If no one knows the answer to these questions and you can direct me in the direction of someone who may, I would really appreciate it.
The question below is from federalhousingtaxcredit.com in the FAQs section.
What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
From my understanding, under the definition of the principal residence under the capital gain tax exclusion, I could buy and house and rent it out for a year or two, live in it for 3 years after renting it, and I’d still be eligible. So, say out of 5 years, I rented it for 2 years, lived in it for 3 years … or out of 4 years, rented it for one year, lived in it for 3 years, would I have to pay back the tax credit?
Read the Washington post article I linked as my “website”. It explains the definition of “principal residence†under capital gain tax exclusion.
Hopefully that’s not too confusing, but I’d appreciate some feedback. I know in the explanation on this site it said, “36 months beginning from the date of purchaseâ€, but according to the Washington Times article, this wouldn’t be correct.
I currently own a mobile home on a rented lot. I purchased a house on January 28, 2009. Does anybody know if I qualify for the first time homebuyers tax credit?
Dana,
I somewhat agree with you. I think it is sad that this blog turned into a huge figth between people instead of just getting information and helping each other. I like you are a first time homebuyer and my husband and I have been house hunting for almost 2 years now. We are jealous of the people who had no problem getting a house because now house, after house, after house is not appraising and we have lost a few thousand dollars down the road since July and we still don’t have a house. We pay $300 for inspections, then $400 for an appraisal and because the house appraises for under the bank wants to foreclosure instead of lowering $10,000. So, there has been 3 houses since October that this has happened to and we have lost almost $700 on each one and we still don’t have a house. So, I believe that as soon as we get one that it is nice that my husband and I are entitled to the $8000. Tons of money wasted that got us nowhere….and lots of stress make it hard. I am so jealous of the people who got their houses and everything done in a month or two. We wait that long just for a response from the bank…then go through all of the other deadlines and pay lots of money just to find out that the bank wants to foreclose and we won’t get any of our money back & that we must move on. It is ridiculious and sooo stressful not knowing when we will find something and finally get to move.
I personally like the idea of an $8,000 credit. Some of you are saying that just because you didnt get any help why should others? Here is one for you….how fair was it that when common, good, hard working individuals went to purchase a home the home values were so out of control that it was financially out of reach. Or how about the people that used their home as an ATM? I personally have been watching the market for a few years and any person with common sense would have seen the market falling apart. Greed is what brought the housing market crashing. I am going to take my hard, well earned money and buy a house utilizing the $8,000 credit. Its meant for first time home buyers….dont hate on us, we obviously didnt create the housing market if we are 1st time home buyers……. Dont blame us because you didnt know the difference between an adjustable mortgage vs fixed…..maybe you should look to blame the real estate agent who helped you signed all the legal documentation. Or here’s one….. quit blaming others….you have some fault in it as well……………….
You know I here all of you people complaining about its not fair. I purchased my home on March 13th, 2008, and here I get nothing. I bought a home that my husband and I could afford. To me its crazy, how do they even come up with the date April 8th, why not January 1st 2008, this housing situation was going on long before the dates they used to see who get the tax credit.
Any advice is appreciated –
I owned a condo in Dallas from 2003 until April 25, 2006.
My dad and I are on the contract.
I got married January 14, 2006 and we moved to an apartment on Feb 11, 2006.
My condo closed on April 25, 2006.
My wife and I have rented from February 2006 until next month when we close on a home on March 5, 2009.
Since I was out of my condo in February but it did not sell until April – is it not considered a “Main Home” from the date we moved out until the date it sold?
Can we claim this tax credit?
Who would now?
Thanks
Ok…I’ve searched thru all of these and don’t know if my question is answered already.
So my wife and I are getting dang close to making an offer on a house. Chances are we won’t be able to close after 4/15. We owe about $1000. So if I file an extension, send the check in, then send that form thing after closing, I’ll get my 8000 bucks? Is that kosher?
Thanks
Lee
Steve – I believe that prohibition remains. Sorry.
The $7500 credit wasn’t available to first time home owners who purchsed from a close relative. Even if the house was bought at full price. Will this be the same for the $8000 refund??
Bought a home in January 09 can I get the credit on my 08 taxes?
Comment by michelle v — Feb 20th 2009 @ 10:30 pm
Yes. See the new 5405
http://www.irs.gov/app/picklis…..formNumber
Bought a home in January 09 can I get the credit on my 08 taxes?
I purchased my home in July 2008 with my fiance. I sold a home last year, however she has never owned a home. We were married in September 2008 and filling jointly this year. My question is if we purchased the home in June 2008 when we were unmarried, do we qualify for the credit?
Any information you get here is prob worth what you pay for it (nothing). My opinion is that it isn’t going to work out well for you but of course I could be wrong. Paying for a tax advisor is the best step if you think it’s worth it.
I’ve seen some people get audited before and you need to pay a lot more than just the principal back if you lose.
“Generally, a first-time homebuyer for a state or local HFA program is an individual who has not had an ownership interest in a principal residence for the past three years. However, individuals who purchase homes in “targeted areas†may be treated as first-time homebuyers even if they have had an ownership interest in a principal
residence in the past three years. Additionally, the new law waives the first-time homebuyer requirement for residences in Presidentially-declared disaster areas and treats these disaster areas as “targeted areas.â€
Alright. Do you have any advise on Federal Disaster Areas?
http://tax.cchgroup.com/legislation/2008-Housing-Assistance-Act.pdf
Jason: The definition of primary residence is pretty vague but if you claim interest deductions or treat it as a primary residence then I’m sure the IRS will too. When you took out the mortgage, did you treat it as primary owner occupied? Did you take tax deductions and get a form from the mortgage company for taxes paid as a primary residence? These things are like W2s. You can’t mistate them.
It really doesn’t make a difference to me but my suggestion is to avoid automatic audits that are computer generated.
Bob. Thanks for your advice. However, I am not trying to perform any kind of scam. There are exclusions that are allowed by law. AS I stated before the IRS defines a MAIN HOME, as where you stayed most of the year, meaning greater than 50%. What I am telling you is that in the past 3 years, I stayed there less than 50% and had 3 other primary resideces. Also, again if you read the Ecomonic Stimulus Revoery Act of 2008, it states the 3 years prior of being a home buyer is waived if you purchase in the year of a declared natural disaster.
Sure my argument matters if I were audited. You have a right to appeal to an IRS supervisor.
Also, for the record in order to claim capital losses for losses on any home, it has to be business or rental property.
Jason: It doesn’t matter what argument you have. The IRS has a computer that automatically checks your past tax returns. If you claimed interest deductions or other housing deductions on any of your past 3 years you will probably be automatically audited. If you filed a capital gains or capital loss or otherwise reported the sale of your condo you will be audited. If you are the subject of a random audit, they can check public records and come to the same conclusion.
You sold your condo in 8-2007 and bought a new house in 6-2008 which is less than 1 year apart. I bet you claimed interest deductions on your 2007 return didn’t you? Not sure how you are going to swing this one…
If you try to run a scam, you need to at least come up with one that isn’t so easily checked by IRS computers.
Bob,
I claimed the credit because I believe I qualified. I bought this with my spouse, not a friend. Going back 3 years from my closing date on my current house would be 6-2005. My Condo sold in 8-2007, so that leaves 26 months in the “IRS’s eyes” as qualification for owning a home the past 36 months. So, in the past 26 months I had 3 seperate apartment and did not live in the Condo 50% of that time. Therefore, it was not my main home. The defenition main home states, residence you lived in 50% of the time. 3 out of the past 4 years tax returns had different addresses.
Also, I read that if you buy in the year that a area is declared a disaster area, it waives certain qualifications of buying a home (specifcally the past 3 years). This was part of the Economic Stimulus Recovery Act in 2008.
I signed up for Audit Support via Turbo Tax, so they would pay all legal fees in the matter if I am audited in 2008 tax year. If the IRS contests the matter I will state my case, believing I am a FTHB. If not I will pay back or come to some sort of agreement with them.
All in all it is a loan I will have to pay back.
Also, where did you get your audit estimations?
Jason: Why would you purposely claim the credit when you know for sure that you aren’t eligible? At least you should have had your friend buy it and split the difference or something. The condo sale is reported and public record. Your house sale is report and public record. I would bet 75% chance you will be audited this year and 95% audited over the next 7 years (since you need to pay back the $7500 it is on your tax return every year for the next 15). 75% chance you will pay some sort of penalty and 50% chance you will go to court and your legal fees will be way more than 7500.
I recommend filing an amendment and paying back the $7500 before the penalties and legal fees hit you.
I bought a home in the same year as a presedentially declared disaster area (Houston, TX from Hurricane IKE) is the FTHB qualification of owning a home in the last 3 years waived? I read this on blogs, but not sure. Also, will the IRS be auditing each FTHB credit?
I claimed the $7,500 and purchased my home in June 2008. I sold a condo that I owned in Aug 2007, however I only lived in the Condo 50% of the time. Neddnelss to say I lost 22k on the sell.
THANKS!
Form 5405 has been updated to reflect the first time homebuyer credit of $8000
http://www.irs.gov/app/picklist/list/formsInstructions.html?value=5405&criteria=formNumber
DB-
As far as I know and understand from reading on the IRS site and others, you can go ahead and file your 2008 taxes and then after closing, you can amend your return with form 5405 and a 1040X.
All: I’ve posted a followup article now that the IRS has actually revised their forms to account for the new changes. Here’s the link:
http://www.fivecentnickel.com/how-to-claim-the-first-time-homebuyer-tax-credit/
Hello,
I have a question about the date of purchase.
We are planning to buy a house in July 2009. We will qualify for the $8000 credit because our income is less than 150K and we are first time homebuyers.
Is that possible to claim it for our 2008 taxes?
Should I file an extension to my federal taxes in April and claim these $8,000 when I have bought the house?
Thanks for your help. That is a great forum, and website.
@Ashley,
Thanks!! I did not notice they updated the same form. Awesome, Thanks!
Yes, it is. Sorry, I should have posted the link before. I think they just put it up this morning, as I checked yesterday and it wasn’t there.
http://www.irs.gov/pub/irs-pdf/f5405.pdf
@Ashley
Can you provide a direct link for this document?
ashley, is it the form to claim & get the $8000 on their 2008 taxes from purchasing in 2009? Can you attach that link to a post…a link to the form?
thanks
The new IRS form is now updated on the site for those interested. It has the option for homes purchased in 2009 to get the $8000 credit. Great!
So those of us who bought just at the end of 2008 have to pay back the $7500 tax credit, but if we waited a month or two we could get $8000 and not have to pay it back? What kind of sense does that make?
I was informed yesterday by a friend who works for a mortgage co. that the min fico score for an FHA loan has been raised from 580 to 620. Looks like lenders are more cautious this time around….
My wife and I just brought out first home and we closed on 12/31/08.
We had taken advantage of the old first time house buyer credit. I am totally livid that a person closing on a house 1 day after us can get more and doesn’t have to pay it back.
When billions have been pumped into the banks and other industries that have been pan handling, surely some provision could have been made to allow those people taking the credit in 2008 to have the condition of repayment waived or at least the 2009 credit should have been at the same terms for the 2008.
Government can’t please people all of the time when it comes to these decisions, but they can at least make it fair. This recession didn’t start 1st Jan 2009 so why penalize those of us who had braved it before this date.
This is far from being fair!!!
@Corey
Yes. Wait for the form to come out and file an amended 2008 return if you have already filed. If not, wait for the form to come out and file it.
I understand the credit can be claimed on the purchaser’s income taxes. Can a person buy a home in 2009 and claim the deduction on their 2008 tax return? Any help on this would be greatly appreciated.
This will have almost no effect in the San Francisco Bay Area or metropolitan areas of California. If you are eligible for the tax credit based on the income level caps, you don’t make enough to afford a house.
I SOLD AND CLOSED ON MY LAST HOUSE MARCH 14 2006 AND NOW I WILL CLOSE ON MY NEW HOUSE MARCH 13 DOES THE CLOSING DATE MATTER TO THE 3 YEAR NEW HOME OWNERSHIP RULE OR SHOULD I MOVE IT TO MARCH 16 OR DO THEY COUNT MARCH 2006 TO MARCH 2009 AS THREE YEARS .
here is some more information. My Aunt is a realtor and she just sent it to me…
Below, please find a synopsis of the Stimulus Plan First-Time Homebuyer Tax Credit as reported by MBSQuoteline.
In an effort to reduce cost to your clients, RMA Lending will cover the cost of ANY appraisal at closing, should you refer your clients to one of our Loan Professionals and we fund your transaction.
The Stimulus Plan was signed into law by President Obama yesterday. It contains a new tax credit for first-time homebuyers. Essentially, first-time homebuyers within certain income limits who purchase a home in 2009 before December 1, 2009 will receive a tax credit of up to $8,000. The program is similar to the $7,500 tax credit which applied to home purchases made in 2008 after April 9. A comparison of the two credit programs is outlined below.
While the Stimulus Plan was still being debated, the Senate version originally included a $15,000 tax credit for all homebuyers. To lower the cost of the Stimulus Plan, the final version of the Plan contained this smaller tax credit, and this tax credit is applicable only to first-time homebuyers.
To qualify as a first-time home buyer as defined in the programs, the purchaser (and the purchaser’s spouse) may not have owned a home in the three years prior to the purchase date of the home. Single family homes qualify for the program. The home must be the primary residence.
Both tax credits are subject to the same adjusted gross income (AGI) limitations (full credit for AGI less than $75,000 single/$150,000 joint, phased out for AGI up to $95,000 single/ $170,000 joint).
The amount for either credit is the lesser of 10% of the home purchase price or $7,500 or $8,000, as applicable.
While a purchaser still owns the home, the $7,500 credit must be repaid in equal payments over a period of 15 years, starting with the 2010 tax filing. The $8,000 credit will not need to be repaid. Again, the $7,500 credit needs to be repaid, while the $8,000 credit does not!
Upon sale of the home, any portion of the $7,500 credit not yet repaid is due in full. No portion of the $8,000 credit is due upon sale of the home, if the home is owned for more than three years. If the home is sold within the first three years, the full amount of the credit is due upon sale.
The $7,500 credit was not available to any purchaser utilizing state/local revenue bond money to help finance the home purchase. There is no such restriction on the $8,000 credit.
Under both the $7,500 and the $8,000 programs, the credit will be claimed on the purchaser’s income taxes. Any amount in excess of taxes owed will be refunded to the purchaser.
I take it we need something like the 5405 for this new tax credit. Does anyone know when it will be out?
I am sure there are many people out there that took out loans to big to pay back. I do not blame people for being upset with the government handing money back to these same people, however; my Fiancee and I only make around 24,000 a year together. We both have excellant credit, and just bought a home. Our payments are where we can afford them, but we are still in the lower income bracket. I do not appreciate people here saying I do not deserve any kind of tax credit. Yes, this money is the taxpayers, which includes me! I have paid more than 8,000 dollars over the past ten years, and so has my Fiancee. I know there are probably people here that pay quite a bit on their taxes, but I do know these people make much more money than I do. What I am trying to say is; Do not judge a book by it’s cover. I may not be one of the many that made a bad decision in buying a home, but I am still in the same bracket as far as income. It is wrong to assume that ALL people in this income bracket ruined the economy. There is not one person to blame; rich, poor, stingy, or financially savey. This is AMERICA! Are we not supposed to come to the aid of our fellow man in times of need? If the fall of economy has not hit you yet; it will.
here are 3 common questions I keep seeing on here that I pulled the questions and answers off of the above listed website for all to see.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.
Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
ok, so I can claim my 2008 taxes now…and if I close on my house in the next couple weeks I can still claim & get the $8000 this year and not have to wait until next year? The banks are just yanking us around right now and we are locked in at a rate. IF we want to keep that rate we have to bring an additional almost $500 to closing for every 15 days that the banks drags out their decision on if they are going to drop the price due to the appraisal or not. So, the $8000 will help a lot since we are having to bring a ton more to closing on top of down & closing & our apartmetn fees.
BOB,
I am surprised a lot of people who do qualify for the interest free loan are not taking it. They take it out of your tax return every year which isn’t bad. Even if it wasn’t needed…it is always good to have just in case of say being laid off. Or even, it could be put into a CD or certificate (even though rates are low right now) and most people could make about $200 a year just off of the money sitting in an account. It isn’t muchm but it is something. When rates go back up a person could make around $500-$600 off of it a year.
CORY,
If there was a way to do it…I think I would have done it a long time ago. So many houses have fallen through for my husband and I days before closing because they don’t appraise and appraise about $20,000-$25,000 under & then the bank decides to foreclose on them instead of us taking the cut. I wish I could get it early.
In response to Cole’s response to Chris.
That is quite a pompous response. I won’t say what I’d like to. However, you don’t know what Chris’ situation was when he had to sell. Therefore calling him “irresponsible” is an “irresponsible” assumption on your part. Many factors beyond a person’s control can put anyone in Chris’ situation. Death in the family, unexpected medical bills, divorce, loss of employment of one or more bread winners, etc etc.. the list goes on and on. Your response is quite out of line and unbecoming for any serious debate.
I hate it when pompous, full of themselves, self righteous people dictate their own beliefs based upon assumption simply for the want of feeling better than someone (or everyone) else. God forbid that Cole ever have an immediate family member suffer from cancer to which he is finacial responsible for the medical bills or lose a job or whatnot. Guess it would make him “irresponsible” because life threw an unexpected hardball. Shhhesh. I’m off my soapbox.
Thanks for that site, Eric; very helpful.
I plan to apply the credit retroactively to my 2008 return which I already filed. When will the form like the 5405 for this $8000 credit be out?
Here’s a great site I found to answer all your questions!
http://www.federalhousingtaxcredit.com/
I bought my house in Sept. 2008! If only I had bought my house a few months later! Jeeeez
Cory – you were not allowed to claim the credit before you purchased your home. What date did you put down on Form 5405. If you put down a future date, I can’t imagine that the IRS would have processed your return – if you “fudged” the number, then that’s tax fraud, I suppose. The credit is NOT in anticipation of a home purchase – it’s after the fact – what were you thinking??? Be prepared for an audit.
Cory,
I am with Heather on this one… how did you take the credit already without having closed on the house yet? You can’t take the credit without having purchased a house and the purchase on a home isn’t a done deal until it is closed. Anything could happen between now and then for the purchase agreement to falter. I hope that it doesn’t but I had two agreements that I thought were done deals and they both fell through due to the sellers.
Heather, looks like I stand to be corrected. You are right. What was passed on Friday and was signed today includes only a waiver in effect after Dec 31st, 2008. What I was drawing upon was the proposed “repeal” (which I see was changed). The original, proposed, repeal would have affected anyone benefitting from the credit.
Darn, my closing date was Dec 31st LOL! Oh well, I am happy with an interest free loan. It helps to have the cash when you find unexpected faults in your new home. Which there have been a few. As for it being “unfair”, as some have stated, I don’t think it is unfair at all. It is still interest free money that is only paid back in $500 increments per year over 15 yrs (if you got the full amount). That is only $41.66 a month. The money has also allowed me to build some equity by improving some things in the home. Something which would have had to wait because I was tapped out after making the downpayment. By having this money available I increase the value of the home which is certainly what we want and partly what this credit is designed to do. Bring property values back up by stimulating the market. Not only in homebuying but in the general market as well. I have put most of this money back into the economy already and inso doing I have paid a few peoples wages for at least a day or two or more. ;o)
The point of buying a house is that you expect the price of the land to go up. So your rent should be priced enough to cover the depreciation of the house/repairs+property tax.
People that base rents on mortgage payments probably shouldn’t have bought the house in the first place.
Rents have traditionally always been much lower than the mortgage payments. Look at a place like Palo Alto, CA. A $500,000 house probably costs $4000 in mortgage+insurance+taxes but will rent for $2000-2500 tops.
Pretty soon people will figure out deductable interest + 8000 tax credit + low interest means they’re losing a lot of money by not buying when the cost of the house is $100,000.
We already had the housing price correction, the rental price correction is coming next.
Bob, But that is happeneing everywhere. I think just like apartments when they collect deposits to cover if anything happens to the place or if any appliance fails, etc. I know in Colorado it is hard to find a house to rent under $1400.00..and oftentimes the mortage for the owners it only $1100 or 1200 a month. They get that extra to help cover expenses and the mortage. I hope this is what you were talking about.
there was only 3 changes from the old to the new. It goes from Jan. 1, 2009-Dec. 1, 2009, amount changed from $7500 to $8000, & it now does not need to be paid back (but there are guidelines where you must live in the house at least 3 years). Here is the complete section from the bill…
SEC. 1006. EXTENSION OF AND INCREASE IN
FIRST-TIME HOMEBUYER CREDIT;
WAIVER OF REQUIREMENT TO
REPAY.
(a) EXTENSION.—
(1) IN GENERAL.—Section 36(h) is amended by
striking ‘‘July 1, 2009’’ and inserting ‘‘December
1, 2009’’.
(2) CONFORMING AMENDMENT.—Section 36(g) is
amended by striking ‘‘July 1, 2009’’ and inserting
‘‘December 1, 2009’’.
(b) INCREASE.—
(1) IN GENERAL.—Section 36(b) is amended by
striking ‘‘$7,500’’ each place it appears and inserting
‘‘$8,000’’.
(2) CONFORMING AMENDMENT.—Section
36(b)(1)(B) is amended by striking ‘‘$3,750’’ and
inserting ‘‘$4,000’’.
(c) WAIVER OF RECAPTURE.—
(1) IN GENERAL.—Paragraph (4) of section
36(f) is amended by adding at the end the following
new subparagraph:
‘‘(D) WAIVER OF RECAPTURE FOR PURCHASES IN
2009.—In the case of any credit allowed with respect
to the purchase of a principal residence
after December 31, 2008, and before December 1,
2009—
‘‘(i) paragraph (1) shall not apply, and
‘‘(ii) paragraph (2) shall apply only if the disposition
or cessation described in paragraph (2)
with respect to such residence occurs during the
36-month period beginning on the date of the
purchase of such residence by the taxpayer.’’.
(2) CONFORMING AMENDMENT.—Subsection (g)
of section 36 is amended by striking ‘‘subsection
(c)’’ and inserting ‘‘subsections (c) and
(f)(4)(D)’’.
(d) COORDINATION WITH FIRST-TIME HOMEBUYER
CREDIT FOR DISTRICT OF COLUMBIA.—
(1) IN GENERAL.—Subsection (e) of section
1400C is amended by adding at the end the following
new paragraph:
‘‘(4) COORDINATION WITH NATIONAL FIRST-TIME
HOMEBUYERS CREDIT.—No credit shall be allowed
under this section to any taxpayer with
respect to the purchase of a residence after December
31, 2008, and before December 1, 2009, if
a credit under section 36 is allowable to such
taxpayer (or the taxpayer’s spouse) with respect
to such purchase.’’.
(2) CONFORMING AMENDMENT.—Section 36(d) is
amended by striking paragraph (1).
(e) REMOVAL OF PROHIBITION ON FINANCING
BY MORTGAGE REVENUE BONDS.—Section 36(d),
as amended by subsection (c)(2), is amended by
striking paragraph (2) and by redesignating
paragraphs (3) and (4) as paragraphs (1) and
(2), respectively.
(f) EFFECTIVE DATE.—The amendments made
by this section shall apply to residences purchased
after December 31, 2008.
I really don’t think you should be able to rent a property to cover your mortgage payments. A mortgage payment is composed of interest and principal. The principal is money that goes in your pocket. So you really should only be able to rent it out to cover the interest payment.
That said, I am looking to buy a house with a mortgage payment of $600 a month and I can probably rent it for $1200-1500 a month. Do I expect this arbitrage to last? No but I will ride it out.
Keihan – the final version of the Bill only forgives the repayment requirement for those purchasing from January 1, 2009 until Dec. 31, 2009. Those who who eligible for the credit and purchased in 2008 still must repay the $7,500.
cory,
I am not sure on an answer for your question, but I am curious as to how you got the credit & the money before purchasing the house? I thought you don’t get it until after purchasing the house?
keihan,
I agree with you on having to havea a high percentage to put down. My husband and I have been renting a 1 bedroom apartment the past 3 years just to save up money. We have saved up 20% but too many of the houses require so much money and work to make them liveable due to foreclosures that we can’t put 20% down because we need some of the money to fix it up. Renting helps save money a little (when renting and apartment), but not much. When renting a house, you are right that many are more that to buy. If we were to rent the house we are going to buy our payments would be about $400-$500 more a month more than a mortage and that money is just going out the window…but I guess we all have to start somewhere.
Keihan-
Where did you read about the repeal for the repayment for the $7,500. I claimed it already, but what I read that the non-repayment was only for the new credit. I hope I am wrong.
Thanks!
Hi all,
I am confused about my specific situation. I have claimed and already received the $7500 credit and am using the money towards the downpayment on a house I expect to close on in April.
So will I amend my 2008 return to claim the extra $500? Can I still use the 7500/8000 for my downpayment? Do I have to pay back the 7500 now and then claim the whole 8000 on my 2009 return?
If someone can please explain this it will be greatly appreciated.
I must say that I disagree with Nickel. Granted some people just shouldn’t buy a house. That’s a given. However, placing a 10% burden on many working class families will simply crush the market even further since they may be able to afford the monthly mortgage, but simply can’t come up with that much cash at once. This will put sellers in more of a precarious situation than they already are and their will be less buyers.
Those of us whom have rented for years know darn well that rentals are ridiculous and you gain little from the endeavor as an renter… with exception of convenience. I could not rent a 2 bedroom house for what my mortgage costs me per month and I have 3 bedrooms, an attched garage, 1 1/2 baths and 1/2 acre lot. A small rental home would cost me nearly 25-30% more per month than my mortgage costs.
Also, what makes you think that those of us taking the credit aren’t tax payers ourselves? Or that we didn’t put much money down (or just the bare min)? I put 15% down on my home. But I am not going to hamper the man who can’t simply because I missed out on the sale?
Perhaps I just shouldn’t take the credit to appease the moaning and griping of some of our citizens (I’m sure they have gotten tax breaks that I don’t qualify for as has everyone).
Or perhaps I ought to bitch and moan at Target cause I didn’t get their newsletter when they had some home appliances on sale and others got them instead. It’s just not fair.
It appears that many have misunderstood the waiver of repayment. The waiver is a “repeal” which means anyone whom has purchased a home between April 2008 and July 2009 (House package… senate package is Sept 1, 2009) will not have to repay the credit as long as the home isn’t sold and remains the primary residence for 36 months. What is unclear, is how long does one have to own the home? Take note that the “primary residence” clause does not negate ownership. It does not say that you can sell the home 3 years from now and be let off the hook. It simply states that it must be your “primary residence” for at least 3 yrs.
My husband and I bought a house in 2004 in Indiana. In 2005, we relocated to Ohio. But we had no luck to sell the house, therefore, we rented the house. If we are going to buy a house as our primary residence this year, are we still eligible for the first-time home buyer tax credit?
Bill,
Thanks for the info. Before I wrote that though, we had called two different H-R Blocks and they both said something different. So apparently they don’t know what they are talking about. That’s why I got on here.
I read the same thing in the bill. I went to ask my accountant, who is currently extremely busy with the tax season and she said she doesn’t really take anything into account until it is on a government website or on http://www.irs.gov. I checked http://www.irs.gov and they don’t have anything about the new law yet…and I guess it won’t actually get signed until a little later today. So hopefully in the next week or two more of the guidelines will surface on when it can be claimed, etc.
124. Abby, I quote from the joint explanation:
“An election is provided to treat a home purchased in the eligible period in 2009 as if purchased on December31, 2008 for purposes ofclaiming the credit on the 2008 tax return and for establishing the beginning ofthe recapture period. Taxpayers may amend their returns for this purpose.”
You can take it in 2008 or 2009. But don’t believe what people have written on some blog. Go read the bill or the joint explanation for yourself. The links are post a few times above.
Better yet, go get professional tax advice. It is really not too much money to go down to H-R Block to get some real certainty.
My husband and I are first-time homebuyers and are going to be closing on our house in March. I know I have seen people say on here that we will be able to claim this on the previous taxes, like a retroactive credit. I just want to be certain that this is true. I have heard so many different answers. If we can claim this on our 2008 taxes it really helps us determine whether or not to buy this house for sure. If anyone knows where this is in the bill and can show me, it would be much appreciated. I am just really getting my hopes up for this house. I just want to know for sure we can get the $8000 on this year’s tax refund!
The $7,500 is not that bad of a deal for those of who bought a home late in 2008. Best case, it’s an interest free loan for 15 years. You can use the money to invest in something else or pay down high interest debt. Either way, it’s going to be a net benefit.
Plus, if you sell your home within those 15 years, you only pay the IRS the lesser of your capital gain on the sale or $7,500 (less what you’ve already paid back). If you take a loss on the home, you pay back nothing. Thus, there is some protection for you in the value of your home with the $7,500 program as well.
Those of us that bought and took the $7,500 credit have nothing to complain about. It’s too bad that I don’t think the $8,000 credit is going to push many people into buying their first homes, since the people who need the most help right now already have a home, or are in far too bad of a position to be able to buy a house regardless.
Do federal declared disaster areas eliminate first-time homebuyer tax credit requirements? I live in Texas (Hurricane IKE) and purchased a new home in June 2008.
@Scott (#98) said:
“Not to mention the whole you should not buy a house if you can not pay at least 10% down… For those of us in the real world, it is not that easy. Because even when you save money for a down payment there is a ton of other expenses for first time homebuyers (lawnmowers, snowblowers, furniture ect.) This housing crisis is because of gready rich people that wanted to make more and more money. If the owners of those banks controlled the loans like they should have we would not be in as big of a mess. Yes, people made bad financial decisions but it is the professionals job and responsibility to stop people from making these decisions and they did not.”
My reply: Sorry, but I stand by the view that people who can’t put down at least 10% shouldn’t be buying a house. In fact, 10% is HALF of the traditionally required down payment. If buying a home with very little down is such a good idea, then why do you people who do it have to pay PMI? It’s because they are at significantly greater risk of defaulting. Owning a home is *not* your birthright — rather, it’s a huge responsibility. If you don’t have enough to make the down payment, then keep on saving. There’s no shame in renting until you’re ready to take on home ownership.
And while I agree that relaxed lending standards contributed to the current crisis, I’m sick and tired of people refusing to take responsibility for their actions. Did banks offer loans to people who probably shouldn’t have had them? Yes, and that pisses me off, especially now that we’re being asked to foot the bill. But did they force people to take these loans (or to even ask for them in the first place)? Absolutely not.
According to c-span.org, the tax credit unfortunately runs until December 1st: http://www.c-span.org/pdf/taxprovisions.pdf . My bet is that the real estate crash will subside around early October. It would be sooner if the credit was higher for a shorter amount of time and more people than just 1st timers were eligible. Ah well.
“FYI, I bought my first home 29 years ago at 22 years old with no help from anyone. Home ownership is the single most important investment a person or family could possibly make. Make that sacrafice and make the purchase!”
OK, you either are a broker, loan officer, insurance saleman, or someone with property on the market. Otherwise, you are smoking something. Mutual funds which track NASDAQ or the S&P 500, hands-down, are better buys right now than most real estate. If the point is investment, buy stock. If the point is having the freedom from rent & pesky landlords, along with the “American Dream” of home ownership, buy a home.
“I know several nitwits who make 6 and 7 seven figures who got where they are because of nepotism/cronynism.” I concur, and this is why we are having the problems we are having economically. Many bottom-of-the-class slackers now have a hand in running major businesses and the government. I’m not sure that anyone with an IQ below 140 should have an executive-level position or be qualified for Congress.
What frustrates me about the whole thing is that the dates published all over the place are all over the place(ending anywhere from June 30 to December 31). Someone needs to scan the bill so that it can be read. I am tired of all the people misreporting.
As an owner of a house on the market, I would rather have seen a $15,000 credit that ends by July 31. Why? It’s targeted and timely. It forces a quicker purchase within a shorter window for a greater dollar amount. If the point is stimulating the economy, why give a smaller tax break nine months down the road? Just get all the procrastinators and “deal” seekers off the fence.
We purchased our current home in July with no regrets. If the $15k had been offered accross the board, I still wouldn’t care. We got our house for $40k or more under value because we bought near market bottom, and the owners had to sell quickly. It already has appraised for $40k more than we paid when we locked our 5.25% interest rate on a refinance. No more piggyback here!
what exactly does it mean when it is said that it is “refundable”? I get everything else about it, but I am a little lost on that part of it.
thanks!
Heather-
from what i understand the 8k IS refundable and yes, it helps knowing u get that back because you still have to pay your downpymt and closing costs…. a total of 14-15k at closing on an 150k home … this credit should and will help first time homebuyers tremendously.
what is the first time homebuyer website?
all I know is that $8000 helps a lot since so much is owed up front because of closing, down & buying down the interest rate. I think if this can be claimed right away it will help a lot of people who have a hard time coming up with thousands & thousands & thousands of dollars for closing. For a place of $150,000 they run at least $9750 along with anything else that needs to be paid up front like “buying down the interest rate”, etc…and then repairs on top of it for all of the foreclosures & short sales out there that are in terrible condition and aren’t liveable.
one more question…the $8000 does not need to be paid back unless the house is sold before the 3 years, correct? And what is meant by refundable? I keep seeing it listed above. And is this $8000 refundable or no?
I have a question, if purchasing a house soon, can it be claimed on 2008 or 2009 just like the old law? My husband and I are closing soon and are debating on if we want to claim our taxes now or wait until after we have our house & then claim the credit.
My husband and I were to be closing on our house on the 20th of this month but it got pushed back due to appraising $20,000 under. We have been under contract on so many houses since July and they all have fallen through anywhere between a week and a half & 5 days before closing due to appraising $20,000-$25,000 under and the seller’s find out they are faced with foreclosure & the banks decide to foreclose instead of taking a cut. Our current situation the bank is deciding if it should foreclose on the house or sell it to my husband and I for $10,000 under asking. To most who know it costs a fortune to do the foreclosure process..it should be simple but the banks are taking their good old time. Hopefully this credit helps to get money out there. I know that with being drug around by the banks not only do we know owe an extra .5% at closing for the new downpayment laws…but our interest rate just went up another .5% due to the banks taking their time on decisions (6-8 weeks) when we are just a week away from closing and already locked in. The longer they take…the higher our interest rate goes since we are already locked and staying w/ the same property.
My reading of the changes is that the credit will be refundable. I expect that this will be detailed on the first time homebuyer credit website later this week after it is official though.
Paul, for purposes of this tax credit, a “first time homebuyer” means you can’t have owned any part of a primary residence within 3 years. Here is a quote from the joint explanation:
“A taxpayer is considered a first-time homebuyer if such individual had no ownership interest in a principal residence in the United States during the three-year period prior to the purchase of the home to which the credit applies.”
I don’t know that anyone can make broad generatlizations about those who make a certain amount of money and others who do not. I know very educated, bright individuals who work for non-profits and, thus, do not make alot of money. I know several nitwits who make 6 and 7 seven figures who got where they are because of nepotism/cronynism. However, there are millions in between who, because of life circumstances, choices, etc, are in the income bracket they are in. This country needs plumbers, garbage collectors, fast-food workers, executives, airline pilots, teachers, etc. We need all of these type of workers and all of them will make different incomes. We all provide valuable services and help support the economic engine of this country. Those who rely on welfare or other taxpayer subsidies (as a result of not WANTING to work – I’m not talking about not being able to find work), have their own issues of failure, etc to deal with. I, for one, am glad that I am a productive citizen who can enjoy a nice lifestyle, a nice home, etc. I worked hard to get here but I don’t look disfavorably upon others who haven’t achieved it. We all follow different paths in life!
Although I do not know the specifics of the Tax Credit yet, I have seen some very interesting replys.
The money is a TAX CREDIT. Therefore, it does not affect your AGI or tax liability [bracket].
Any claims will be for your 2008 Return or 2009 Return, not 2009 and 2010 as some have written. In other words you are now filing, in 2009, your 2008 Returns and in 2010 you will file your 2009 Return.
From what I understand so far is that this will still be for FIRST TIME HOMEBUYERS. However, this is debatable.
MY OPINION, if the Government wanted to move houses faster then this money would somehow need to be made available for settlement. The most difficult thing for a person to buy a home is coming up with the Downpayment and Closing Costs.
FYI, I bought my first home 29 years ago at 22 years old with no help from anyone. Home ownership is the single most important investment a person or family could possibly make. Make that sacrafice and make the purchase!
The $7500 is to be paid back if you purchased before Jan 1st, 2009. The $8000 is not to be paid back if you purchased on or after Jan 1st, 2009.
Jennifer – If you are single and make under $75,000 and purchase a home you recieve the $8000 not half. Half is if 2 single people buy a home they each get half.
Okay, here’s a tricky one…
My wife and I bought land with cash on Dec 22, 2008 and are in the process of building our house using cash going forward. The previous bill allowed for a person to build or self-contract the building of their home, and still qualify for the $7500 credit as long as you moved into the house by the end of June 2009. I expect that the new extended date of December 1, 2009 will be the deadline move-in date for the new $8000 credit, but I wonder if the fact that the land was purchased in 2008 will have any effect on the whole deal. Anyone have any ideas? Thanks.
I am single and will be closing Feb. 18th, 2009. Will the $8000 apply to me or will it be cut in half to $4000 because I am single?
I am in the same boat as Mike C. Does anybody have any concrete information as to whether the $7500 tax credit will be changed to a non-refundable credit also???
Okay. I’ve been reading all over about this new housing tax credit. Some people say the $7,500 tax credit (the one that has to be repaid over 15 years) will PHASED OUT and replaced by the new $8,000 tax credit (the one that does NOT have to be repaid). I bought my house in May of 2008 and just filed my taxes and accepted the $7,500 tax credit (knowing that I have to repay it). Will I be able to replace the $7,500 tax credit with the new $8,000 tax credit and not have to pay it back? Some are saying it’s only for people who buy homes in 2009. Some say it will replace the $7,500 tax credit ! Which is true? Where can I find some CONCRETE info. on this? I’m not complaining, I just want to know the real answer. Obviously the difference between repaying 7,500 and getting 8,000 for free is HUGE. If anybody has answers, I’d appreciate it. Thanks.
98
I have to make this comment. The crisis is not only due to greed, or bankers, or Wall Street guys but irresponsibility of many Americans who spend more than they make, run up large sums on credit cards, and make poor financial decisions. Even a family making the median income can save 10% of their wages (I know I did for years). After years of working 15-hour days overseas away from home, I am one of those people that make over 150K. This is a result of hard work. I never received a penny from anyone and had to pay for my own education and the inheritance went to some one else (This taught me to save money). The bottom line is that by taking a second job and living in your means, and saving, even those us not so lucky as to have rich parents can succeed in America (It’s a great country). The disappointment I have is that very few articles discuss personnel responsibility. A Nation so great as to guarantee all of us those first 10 Amendments to our Constitution deserves Citizens who take personnel responsibility to keep that Nation great. This is what I have learned working overseas for 10 years.
No offense, but I think some of the comments made on this site, show how out of touch some people are with what it is really like to live in America. Like the person that said “Your household income also has to be relatively low, I think its under $150k to be eligible for the full credit.” The median family income in the US is about $50,000, over 90% of the population made less than 150K, to say that three times that is relatively low shows the lack of knowledge some people have. Not to mentaion the whole you should not buy a house if you can not pay at least 10% down. That is fine if you received a free ride through school, you inherited money, or your parents paid for everything until you were 20+ years old. For those of us in the real world, it is not that easy. Because even when you save money for a down payment there is a ton of other expenses for first time homebuyers (lawnmowers, snowblowers, furniture ect.) This housing crisis is becuase of gready rich people that wanted to make more and more money. If the owners of those banks controled the loans like they should have we would not be in as big of a mess. Yes, people made bad financial desicions but it is the proffesionals job and responsablity to stop people from making these desicions and they did not.
My wife and I bought our first house in the 8/2008, and we will be receiving the $7,500 tax credit. I hope we don’t have to pay it back, but if I have to that’s okay too. Since the majority of our payment goes to interest in the first few years of our loan, we will save around $30,000 dollars if we put all $7,500 on our principal. Since we are actually getting back a little over $8,000 total in taxes, I figured that next year we should break just about even.
88. I don’t really understand your question. But the new law is mostly the same as the old one. You still have to live in the house for 36 months after buying to keep the credit.
89. This credit is just like the old credit. It is the lesser of 8000 or 10%. If you just read a couple of comments above you, you will see the links. You can answer all your questions by reading it. http://www.rules.house.gov/111/LegText/hr1_cr_jesb.pdf
90. As mentioned above, the tax is refundable meaning that since you have no more tax liability, you get an 8000 check if you refile your 2008 taxes claiming the tax credit. You also have the option of claiming it on your 2009 taxes. If you owed 500 in taxes next year and claimed the 8000 credit on that return, you would get a refund of 7500.
91. Oh cry me a river, erin. You hardly seem in a position to complain about others getting an unfair deal. You got a 7500 no interest loan that 95% of us didn’t get a chance to get (I made that stat up). You are getting free money that I have to fund from my taxes. Think about it – you get to pay it back over 15 years with future deflated dollars, all the while earning interest on it.
96. Joe, you can still take the credit by refiling your taxes. You should take it. Why not? You can just put it in a savings account and earn interest on it. What a fantastic deal. It is really a no brainer.
Joe – why not take the 7,500?
$500 a year to pay back an interest free loan is still not a bad deal. If you pay off a credit card or use it to fix up your home it’s still positive income. If you get paid twice a month, add a $25 a month additional deduction to your payroll taxes and you’ve got it covered.
Wow, that hurts we bought our home on Dec. 18th of 2008. I didn’t take the 7,500 because I didn’t want to have to pay back the money over 15 years. Could have really used that money too. Oh, well I guess I can’t cry over spilled milk.
If you were forced to sell in the first place you were not responsible the first time.
If your house value is that low stay in it, dont sell, its that easy. If you can’t afford it and have to sell you were not responsible.
You would think you would have waited alittle bit to buy another house if you just pulled $40,000 grand out of your pocket. hmmm food for thought.
So what about those of us who had to sell their house, came up with $40,000 out of pocket to cover realtor comission and to payoff the mortgage because the market crashed and then had to come up with 10% for the new house because lenders were being stingy? I guess we’re out of luck for being responsible.
I’m also trying to figure out if this is refundable. If we owe the IRS $500 at the end of all our tax preparations, does that mean we’ll get a $7500 tax return? Or if we’re due to have a $500 refund, would we get $8500 back? Can someone clarify this for me?
These credits are meant to actually stimulate home buying, they may save some people’s rearends but I think people are missing what it is for. Yes, its not fair to others, but you can’t make everyone happy.
People “took the leap” (if it was a leap people shouldnt have bought) this is part of a package to encourage homebuying if you bought in 08 you didnt even know the credit was coming so you shouldnt “need it”.
Its to stimulate something, people loosing houses because of ARM’s or loss of employment will not be able to keep their boat afloat with this they will simply be plugging a hole in their boat with a cork, a temporary fix.
My parents and 2 siblings bought in 08 and are not complaining about the $7500 they are getting knowing we will get $8000 because they are happy we are buying. I know this is America but be happy for other people instead of competing with them, “keeping up with the Jones” is gonna become a pasttime in the next few years if it hasnt already.
It’s a real slap in the face to those who took the leap in 2008 and bought a house for the first time. 2008 was not much better than 2009. The difference of having to pay back the $7500. over receiving the $8000. for free – is absolute nonsense. I am fine with the repayment program and I not fine with others receiving “free moneyâ€. Nothing is ever for “freeâ€. The rest of us not benefiting from this new program will be sure to pay for this.
OK, sorry if this question is old but here goes…i already got a 500 dollar return from my 08 taxes and i close on a new house in march. i am 1st time home buyer btw..will i actually get a check in the mail from the 8000 credit or is it not cash in my hand money? like some kind of less taxes ill pay? sorry if this question is retarded..
I was curious… the $7500 credit was based on the cost of the house, it was 10% of the purchase price, hence you had to buy a house over $75,000 to get the full amount.
Does this new $8000 credit have a purchase price requirement or is it just a flat $8000? We are putting in an offer on a fixer upper house around the $70,000-$80,000 and was just curious (it will affect the bid we put in).
If anyone does have an answer that they found online can they also link the webpage they found it on.
Thank you!
I closed on a new home in June 2008, but sold a condo i owned in August 2007. I am married and meet the AGI income requirements. UNDER the new law will it remove the “owning a primary residence in the last 3 years” requirement, even if i purchased in 2008 ?
THANKS !!
Tim
You can get a complete breakdown of the stimulus package at the following website… http://www.rules.house.gov/bills_details.aspx?NewsID=4149
75. bob, for a home bought this year, you cannot take the 7500 credit. Only the 8000 credit will be available. As for when you take the credit, you have an option. You can treat the 2009 purchase as if it happened in 2008 and claim the 8000 on your 2008 returns. If you buy a house after you file your 2008 tax return, you can still amend the 2008 return later in the year and get the 8000. Or, you can wait till you file your 2009 to take it.
77. yes, joint filers with MAGI >= $170K means no credit
83. Ryan = flamebait.
85. As far as how this changes your payment plan with them, that sounds like a question for them or a tax attorney. I do know that you can not use this directly for closing, though, because you can’t take it until after you buy the house.
link to the bill, section 6 pages 16-18 are relevant
http://www.rules.house.gov/111/LegText/hr1_cr_jesb.pdf
how about this, i owe the govt $14,000 in back taxes d/t a major screw up with h&r block. would the 8,000 … A. go toward the past debt(have a payment plan with them). B. get as a refund. C. be able to use for closing.
Would it be better for my fiance to buy the house in her name(we plan on marrying later this yr)?
just curious
steve
81
Opps, looks like I am wrong, and the limits still apply. I guess I will just have to pay all the taxes again this year.
How can anyone stand behind the DemoRats after they pushed this outrageously irresponsible spending bill through? Making the home buyer credit retroactive for some (Jan. 1) but not all (April15, 2008) is outright insolent.
Pelosi, Reid, Schumer, Barney Frank, et al, should be tarred and feathered – when you vote for a part who uses a Donkey as a mascot should you really surprised to learn you just sent a jackass to Washington?
#9
I paid $50,000 in Federal Taxes last year which is a result of hard work (not a banker or wall street guy) The fact that income earners in this bracket are usually excluded from a tax break is quite frankly ridiculous. I make no complaints about paying taxes and it seems like I am paying my “fair†share. I did not own a home but as soon as this hit the Senate I put in an offer and will pay cash for the house. I waited years to buy so I could save the money and not take out a loan (not a big house either). I think the intent of this break is to get people to buy houses to improve the economy (so the Treasury and Fed don’t have to buy them). So people should not get upset if people who pay the bulk of the taxes get a 16% tax bill reduction.
incorrect info you gave
HOUSE CREIT BETWEEN JAN 1 AND DEC 1 2009….YOU SAID AUG …wrong
This was found on the Senate website and details the final conclusion of this bill. As it stands, it is basically an extension of the original 7500 bill, only now it’s not repayable and it’s extended till the end of 2009.
The conference agreement extends the existing homebuyer credit for qualifying home
purchases before December 1,2009. In addition, it increases the maximum credit amount to
$8,000 ($4,000 for a married individual filing separately) and waives the recapture of the credit
for qualifying home purchases afier December 31, 2008 and before December I, 2009. This
waiver of recapture applies without regard to whether the taxpayer elects to treat the purchase in
2009 as occurring on December 31,2008. If the taxpayer disposes of the home or the home
otherwise ceases to be the principal residence of the taxpayer within 36 months from the date of
purchase, the present law rules for recapture of the credit will apply.
The conference agreement modifies the coordination with the first-time homebuyer credit
for residents of the District of Columbia under section 1400C. No credit under section 1400C
shall be allowed to any taxpayer with respect to the purchase of a residence during 2009 if a
credit under section 36 is allowable to such taxpayer (or the taxpayer’s spouse) with respect to
such purchase. Taxpayers thus qualify for the more generous national first-time homebuyer
credit rather than the D.C. homebuyer credit for qualifying purchases in 2009. No credit under
section 36 is allowed for a taxpayer who claimed the D.C. homebuyer credit in any prior taxable
year.
The conference agreement removes the prohibition on claiming the credit if the residence
is financed by the proceeds of a mortgage revenue bond, a qualified mortgage issue the interest
on which is exempt from tax under section 103. .
Effective date.-The provision applies to residences purchased after December 31,2008.
Do we know the definition of a “First Time Homebuyer” according to the bill?
I believe FHA defines a first-time home buyer as someone who has not occupied a purchased home in over 3 years I think. We will be looking for a house and have lived in an apartment for 4 years but we have bought a home before…in excess of 6 years ago.
So I make 97,000, and bought a house in nov 08. the income limit for the $7500 is 95k. is there a phase out schedule or is it all or nothing?
joint filers with MAGI >= $170K no credit?
If i signed my new house building purchase contract in 2008 September and if i am closing my house for example in March 31 2009 for which tax credit i am eligible for? Am i eligible for $8000 non refundable or $7500 refundable for the coming 15 years? The other thing is since i did not file my tax returns can i claim it in this tax year i.e. the income i earned in 2008 and going to file taxes for 2008 income? As a couple we are below 150000 early income range. If anybody knows correct answer please reply.
How does this 8000 apply to people that bought houses from Jan 1 2009 to now.
They get the better deal because you don’t need to pay back the 7500.
But can you file your taxes and get the 7500 for 2008 then get 500 more for 2009 or do you need to wait until April 2010 to file your 2009 taxes and get the 8000 back?
The 5% requirement was part of a republican proposal and was slammed down on the senate floor by democrats. It was not part of the Isakson Amendment – the 15k homebuyer tax deduction (reduction in taxes owed dollar for dollar). The 5% downpayment requirement could have made it’s way back into the bill, but according to the finance.senate.gov pdf that highlights the changes they made late last night – it was not.
Of course this would be a heck of a lot easier if they would just let the public read it for 48hours like they promised.
So here’s how things stand. The present law gives a refundable tax credit equal to the lesser of 7500 (3750 for married filing separately) or 10% of the house. The house has to be bought from April 9, 2008 to December 31, 2008 (It was July 1, 2009, but this new law changes/overrides that). You have to be a first time home buyer and live in your home for 3 years to take the credit. The credit phases out for individual taxpayers with modified adjusted gross income between $75,000 and $95,000 ($150,000 and $170,000 for joint filers) for the year of purchase. The credit has to be paid back at 500 a year over 15 years starting 2 tax years from the purchase. The credit can be claimed on your 2008 taxes even if you buy in 2009. You are able to amend your old 2008 tax returns to claim it.
This is a done deal in congress. As soon as the president signs this new bill into law (on Monday supposedly), it will extend and modify the old law in a few important ways. For homes bought from 1 January to 1 December 2009, the credit is now 8,000, it is still refundable, and it doesn’t need to be repaid. If the house stops being your primary residence before 36 months are up, the tax credit has to be paid back in full. The rest is the same.
There is no down payment needed to qualify – not sure where you got that since it is not an any of the 4 versions. It is refundable so you can get this tax credit even if you don’t owe any taxes.
okay….as far as downpayments……I have looked and cannot find anything…….
If one looks at the tax form it isn’t a requirement now.
I think that the downpayment requirment of 5% was added in the senate to the 15000 deal.
Where is the 5% downpayment coming from? I have ehard this but haven’t seen it anywhere but in blogs. if anyone can sustantiate it please do so…..otherwise it is complete hearsay.
I also heard that there is a requirement for downpayment to qualify. Can anyone confirm if this is true? I had the money to put down, but didnt want to take it out of my accounts with the stocks so bad. I hope that didn’t ruin my chances of getting the credit…
Mary-(#9)-
“One of the things I find most frustrating (and there are a hundred things I find frustrating about this ridiculous pork bill) is that all the so-called ‘tax breaks’ are going to people who are not the high producers of our society, and who have helped cause this mess with their bad fiscal decisions.”
Interesting; so, my husband–the one who spent 20 years of his life defending your country, was in 2 wars and a number of peace-keeping missions to make sure that you could live a free life, is not a “high producer of society”? We are getting this $7500 break–and it is about time too. I think he deserves it. Shame on you for flying your American flag on your website, and tooting your “God bless the troops” slogans. Hypocrate.
I think there is also a 3.5% (current) or 5% (proposed) down payment requirment.
Anna
Best as I understand it’s $7,500 repayable if you closed between April of 08 and December 31 of 08. From January of 09 to December 1 of 09 it would be $7,500 or $8,000 (still not positive of the final number) not repayable. It’s 10% of the home’s purchase price up to that number. So if you buy a $70,000 house (still possible in my market) you’d qualify to $7,000.
Still subject to income limits and first time buyer requirements.
Passed by the house, senate voting this afternoon – so maybe by tomorrow we can vent over and discuss “real” information!
Thank you Dave!
Unfortunately what I’m not reading in this is that recepients under the old bill would be grandfathered into not having to repay… unless anyone can see something different??
And if you look up the irs form 5405, the limits are
married full benefit up to $150k, phased out by $170k of MAGI
single full benefit to $75k, phased out by $95k MAGI
MAGI is before taking Sched 40 and personal deductions
Just because some of us may have the opportunity to recoup some of the debt the government is piling on us, those that don’t have a hope of getting a new home stimulus credit shouldn’t be criticizing us or even those that are complaining they aren’t being treated fairly. You should be criticizing your elected officials. I would have never voted for any stimulus bill because i think it is meddling with the free economy, but I won’t think twice about getting some of my hard earned tax dollars back.
i dont mind repaying it. i just wanted to know for sure what was going on
Here what I got from pdf file of what I believe is the compromise version house just passed
SEC. 1006. EXTENSION OF AND INCREASE IN FIRST-TIME
17 HOMEBUYER CREDIT; WAIVER OF REQUIRE18
MENT TO REPAY.
19 (a) EXTENSION.—
20 (1) IN GENERAL.—Section 36(h) is amended by
21 striking ‘‘July 1, 2009’’ and inserting ‘‘December 1,
22 2009’’.
23 (2) CONFORMING AMENDMENT.—Section 36(g)
24 is amended by striking ‘‘July 1, 2009’’ and inserting
25 ‘‘December 1, 2009’’.
O:\ERN\ERN09560.LC
25
S.L.C.
1 (b) INCREASE.—
2 (1) IN GENERAL.—Section 36(b) is amended by
3 striking ‘‘$7,500’’ each place it appears and insert4
ing ‘‘$8,000’’.
5 (2) CONFORMING AMENDMENT.—Section
6 36(b)(1)(B) is amended by striking ‘‘$3,750’’ and
7 inserting ‘‘$4,000’’.
8 (c) WAIVER OF RECAPTURE.—
9 (1) IN GENERAL.—Paragraph (4) of section
10 36(f) is amended by adding at the end the following
11 new subparagraph:
12 ‘‘(D) WAIVER OF RECAPTURE FOR PUR13
CHASES IN 2009.—In the case of any credit al14
lowed with respect to the purchase of a prin15
cipal residence after December 31, 2008, and
16 before December 1, 2009—
17 ‘‘(i) paragraph (1) shall not apply,
18 and
19 ‘‘(ii) paragraph (2) shall apply only if
20 the disposition or cessation described in
21 paragraph (2) with respect to such resi22
dence occurs during the 36-month period
23 beginning on the date of the purchase of
24 such residence by the taxpayer.’’.
O:\ERN\ERN09560.LC
26
S.L.C.
1 (2) CONFORMING AMENDMENT.—Subsection (g)
2 of section 36 is amended by striking ‘‘subsection
3 (c)’’ and inserting ‘‘subsections (c) and (f)(4)(D)’’.
4 (d) COORDINATION WITH FIRST-TIME HOMEBUYER
5 CREDIT FOR DISTRICT OF COLUMBIA.—
6 (1) IN GENERAL.—Subsection (e) of section
7 1400C is amended by adding at the end the fol8
lowing new paragraph:
9 ‘‘(4) COORDINATION WITH NATIONAL FIRST10
TIME HOMEBUYERS CREDIT.—No credit shall be al11
lowed under this section to any taxpayer with re12
spect to the purchase of a residence after December
13 31, 2008, and before December 1, 2009, if a credit
14 under section 36 is allowable to such taxpayer (or
15 the taxpayer’s spouse) with respect to such pur16
chase.’’.
17 (2) CONFORMING AMENDMENT.—Section 36(d)
18 is amended by striking paragraph (1).
19 (e) REMOVAL OF PROHIBITION ON FINANCING BY
20 MORTGAGE REVENUE BONDS.—Section 36(d), as amend21
ed by subsection (c)(2), is amended by striking paragraph
22 (2) and by redesignating paragraphs (3) and (4) as para23
graphs (1) and (2), respectively.
O:\ERN\ERN09560.LC
27
S.L.C.
1 (f) EFFECTIVE DATE.—The amendments made by
2 this section shall apply to residences purchased after De3
cember 31, 2008.
Wow. To everyone who is crying about why not me, grow up. People need to look to beyond their own pockets. I challenge everyone to donate something to the less fortunate every time you make a selfish comment complaining about not getting yours.
I am trying to understand but so many people are saying so many different things 🙁
so the bottom line is since i purchased my house in nov08 i will have to repay the $7500 right?
We only put 5% down on our house back in 2004, taking advantage of a creative loan that allowed us to avoid PMI but start out with a 2nd mortgage right off the bat and a 30 year fixed primary mortgage.
We benefited from creative loan standards just as anyone did who purchased a home in the last 5-7 years, however we are in no danger of defaulting on our mortgage in the next few years AND not at all contributors to the mortgage meltdown.
I am disappointed to see the attacks based on such an arbitrary number as the % down payment on a house. It is the housing market in a specific area and overall financial strategies, planning for emergencies and the future that makes a household a good financial bet in home ownership, not their % down payment, creative loans, terms or even household income!
How about new construction? I closed on a construction loan in Sept ’08 and expect to do the final closing in April ’09. Which plan do you think I would fall under? The $7500 “loan” , $7500 forgiven “loan”, or an $8000 credit? Should I file right away so that I don’t lose the $7500 loan that would be sunset by the new bill or wait until the bill passes to get $8000?
The $15,000 proposed by the Senate would only credit people up to the amount they paid in taxes. So if your federal income tax liability (not what you owe after you do your taxes, but what you pay in over the course of the year) was $10,000, you’d only get $10,000 credited.
The $7,500 credit (back to that amount in today’s news) is a refundable credit, regardless of what your liability is, you get the full amount. If you were having to pay $500, you’d get $7,000 back, if you were already getting a refund of $500 you’d get $8,000.
I wonder, with the income limits, how many people would have gotten anything from the $15,000. The houses we need to get off of the market in my area are the under $100k homes. All need work and the buyers tend to be lower income. This $7,500 will go a long way towards remodeling these homes and making them livable.
The negative here is the distinction of first time home buyers. A person who is divorced and was on title with their ex within the past three years does not qualify so far as I can tell.
Does anyone know what the phase out schedule versus income is? Is it on gross or adjusted income?
to dave.
Yes if you qualified before the bill nothing will change. File your taxes. You wont be hurt at all. If by chance it is retroactive you may see your situation improve. But the 7500 credit is yours…..file by 15 april still.LOL
To answer the questions about can previous purchases qualify for the credit when it becomes law> Maybe
Can this bill change your credit in a negative manner….ie if you bought a house in nov 08.> No!
It will only improve or stay the same if you bought within the previous guidelines.
It may improve….it may not….but this will not hurt one……
So it is my opinion that if the 8000 tax credit is passed…..it would be in effect for everyone purchasing between the pass date and original end….or extended. Also those who buy before July 1 can claim on 2008 taxes.
The gov won’t change a current tax provision to hurt the filer…..
For example if someone is expecting or has signed a purchase agreement and expect to file for thier credit on 08…the gov will not take that away…..
They will only add or improve this.
The people worried about losing the 15K probably don’t understand the tax code (refundable vs non refund ) etc. The 15k was never going to pass….senate house and pres are dems majority….this would favor the republican view….which is where I fall ….
But don’t fear……IF you qualified before this passing will only improve your status or keep it the same.
I have read all the responses and I think I got my answer. Basically Im concerned if I will benefit fromt he $7500 taxc credit since I bought my house in November of 08. The new agreement the released and are about to sign says the house must be purchased between Jan and dec of 09. This tells me that the bill before has changed, I know it still may be early but does anyone know for sure if we can stillapply for this?
We know original $7,500 “loan” was for a first time buyer purchasing in 2008 and no later than 7/1/2009. Those who bought in 2009 before 7/1 can claim the credit on their 2008 taxes. The new stimuls package is said to include an $8,000 credit for those who purchased 1/1/09 – 12/1/2009. The latter does not need to be repaid.
Assuming there are no changes and president signs stimulus bill next week as expected. What happens if you close on a date that qualifies you for both, say on 2/27/09? Does the new credit replace the existing or can you claim the $7,500 “loan” on 2008 taxes and the 8,000 credit on 2009 taxes? If not can we claim the $8,000 credit on 2008 tax returns?
Earning less than 150k for the household is relatively low? What fantasy world are you living in?
Why do people feel entitlement to this money? I am all for hard work, but do you know how many people were stiffed out of houses b/c of predatory lendors…and yes, people were ignorant to accept the loans that shot up and forced them to give up their homes. These people just didnt have the knowledge, proper education. What does that say about our school systems? The bones of this country now have osteoperosis and if test scores prove anything…I dont see great future
Did the dates change to early 2008
My fiance and I bought a home in September 08 and have not filed yet. We are both first time home buyers and are wondering how we file for the credit. Since we are not married yet we have to file individually. Does just one of us file as the first time home buyer? Do we each file for it and get half of the credit?
It would also be great to know about the repayment requirements of those who purchased under last year’s plan, but I understand no one is too sure of this yet.
Thanks!
Thanks Mike! You are the best!
Vanessa,
Does anyone now if this credit applies to first time home builders if you move in between 1/1 and 8/31 as I know last years “loan” applied to first time home builders based on move in date?
Ok, if it is all your taxes including social and medicare then yea, that number makes way more sense. I am close to the same numbers and unfortunatly I purchased my house in January so I get nothing out of any of this, but at least I know I can handle it all on my own.
Thanks Philip,
What I ment was every single penny the government takes from me i.e. Social security that I’ll never see, or Medicade I’ll never benefit from, federal, state and LOCAL taxes. I’m 29 years old, single, make $65M a year and HAD to buy a house to stop the government from robbing all my hard work
@ Steve,
based on purchase date you should still get the $7,500 credit, not certain on having to pay pack over time. However if you paid 18k in taxes and are filing single it sounds like you may be well above the income limits for claiming this. You should check those numbers as well to make sure you have it filed correctly.
I’m in Terry’s boat, does anyone know what happens to the tax credit to us (purchased in Sept 08)? Do we still quaify for anything, and if so, what? I awoke hungover (watched my cards lose to Notre Dame last night) to my girlfriend calling me and telling me I wouldn’t. I have already filed but awaiting my refund. I think it’s poop anyway considering between all the taxes I got taken for ($18384.40) last year! Ron Paul wouldn’t have let this happen!
Bryan – worst case scenario you’d probably have to pay back a pro-rated portion of the credit out of your proceeds at the time of sale.
People who buy HUD homes for half price under the “good neighbor” program are also required to stay for three years. If they sell early, they have a pro rated penalty. I’m making an assumption that this would be treated in a similar fashion.
The tax credit for purchases in 2008 is still there, typically anything in current tax law is grandfathered. What I’m not sure about is whether the new bill raises the total to $8,000 and removes the payback provision all the way back to April of 2008 or just for purchases starting this year.
I have a quick question about the concept of “you have to stay in your home for three years.” My wife and I are considering purchasing the house we are now renting. This credit is an obvious incentive, but we may have to move in 2 years for education reasons. We are planning on renting out the house after living in the house for those 2 years. Does anyone know if “staying in your home” might refer to simply owning the property, or actually living in it? I know, asking about the minutia even before bill is signed is a little presumptive, but I thought it couldn’t hurt to ask. Thanks for the help!
Doublechecking: If I purchased a home in September 2008, I will be eligible for the $7500 (which will have to be repaid) – they are not going to take this away after they sign the new bill?
Vanessa
If the original wording of the $7,500 credit still applies, which I think it still does, you are out of luck if either one of you owned a home within the past three years.
You don’t have the prorata abiltiy to claim only part of the credit either. IMHO you should, but what can you do?
Could someone please clarify that if my husband has never owned a house before and I have. Do we get half the tax credit or nothing at all? Since my husband has 50% joint ownership of the new home we will close on, would we quailfy for half the tax right off or nothing at all. WE are closing on our house on March 13, 2009. Please advise someone.
Thank you,
Vanessa
Tammy,
The April 9, 2008 date stands and you won’t get your credit taken away. The way the credit reads now, you are not eligible for the $8M credit becuase you bought before 1-1-09.
Go ahread and file IMHO. You can always ammend.
As far as this being a “stimulus” as nickel claims for housing, the most this will do is perhaps get excess housing reduced and improve builders’ liquidity; it will not stimulate a new construction recovery becuase there is nothing in this bill that stimulates job creation based on value creation. Where is the incentive to build a better mousetrap?
Housing is not a driver of the economy but rather a reflection of value/wealth creation. A $13 per week increase in take home for most people is not going to do anything to create value and hence jobs.
I can solve the housing demand problem in about 10 seconds. Let me bring in a couple 100,000 educated Chinesse and Indians that have some $$$$$$$$$ $$cash. They will start businesses, create value, and bingo, problem solved. You won’t be able to build homes fast enough.
We purchased April 15, 2008 – we qualify for the $7500 and are planning to sign and efile with our accountant tomorrow. Does anyone understand if the April 9, 2008 date still stands or is there a chance I will get this credit taken away with the way they plan to ammend? Should I still file to tomorrow or wait? Does it matter since I can ammend the return?
Caveat – I am not an accountant…
David’s question as to whether his tax credit from last year’s purchase is still available – I believe it is. My tax accountant is telling me that people have not been taking the credit because it has to be repaid, but that may change depending on how this legislation reads when it’s all complete and signed, rumor says that not needing repayment might be backdated. If someone declined it initially in their 2008 taxes, they could still amend that return and claim it.
I just bought my house Jan. 30th 09 and right after I did my taxes inorder to recieve the $7,500, so I can rehab my house a little. So now that I have filed does anyone know if I am able to get the other $8,000 even though I recieved the $7,500 already? Thanks!
Here’s what CNN is reporting right now…
Temporary credit for home buyers: The bill increases the size of an existing temporary and refundable first-time home buyer credit to $8,000, up from $7,500. It also removes the requirement under current law that the credit be paid back if the buyer stays in the home for at least three years. And it would extend the credit’s expiration date to Dec. 1, 2009, from July 1. Those eligible for this credit must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009.
The full credit is available to those making $75,000 or less ($150,000 for joint filers). Estimated cost: $6.6 billion.
In the USA Today paper and website it doesn’t state that the tax credit is just for first time home buyers it just says it’s been reduced from 15,000 to 8,000 for home buyers of new and exisiting homes. I know other news sites are saying just for first time home buyers. Whats the truth and does anyone really know?
One positive to the market staying down for a prolonged period of time is that people who recognize the opportunity to buy have had an extended period of time to prepare for purchase. I know several individuals and couples that have been casually looking for months – meanwhile saving money. They haven’t had any huge incentive to buy as they just keep watching prices plummet. I think this tax credit could get a lot of them off of the sideline. One concern I have – will this credit create a real bottom to the market or a false bottom? When the credit expires, will prices/values just drop more?
I really appreciate the feedback!
I think that some of you are getting judgmental and jumping to conclusions: I agree that those who are purely basing their home buying decisions on this tax credit should not be buying in the first place. However, I disagree with your assertion that “if people can’t come to the table with 10-20% of the purchase price in the form of a downpayment, then they shouldn’t be buying a house and that’s what got us into trouble in the first place.” It’s just not possible anymore to put less than 20% down on a house or condo in many nicer urban areas. This is because now, along with avoiding PMI, there is the added issue of getting below the $417,000 conforming limit. The difference between conforming rates and Jumbo rates used to be small. The jumbo rate is now more than 2 1/2% higher than the conforming rate. That’s crazy! Worse than that, if the home costs more than 520K, the buyer has to put down more than 20% so that the mortgage remains less than $417,000 to avoid the Jumbo interest rate. 99.9 % of these buyers would have no problem making normal payments for the higher amount at the conforming mortgage rate or even for a slightly higher Jumbo rate. But now, along with avoiding PMI, there is now the added issue of getting enough cash to get your mortgage below the $417,000 conforming limit. Just because it’s not easy for the buyers to find all of that cash, does not mean that the home is beyond the buyer’s means. The $8,000 rebate would be a nice little bonus, even a year after scrounging together so much cash.
Rebecca,
This is how I understand it, however since the bill is not officially out, this is just my opinion
A. You should be able to claim on this year’s tax return if you purchase before taxes are due. Another option i heard is if you are really planning to buy a house and do not need your tax return right away, you can file for an extension on your 2009 taxes, purchases a house during that time, and then claim the credit. If you don’t buy before the tax deadline, then yes, it will be on your 2010 claim.
B. Don’t think so. It will be a refundable tax credit meaning after the bottom line is drawn (either you owe or are getting a refund) a full $8,000 credit will be added to that number. IE 1 (your getting a refund of 500 from your tax return, you would get $8,500) IE2 (you owe the government $500, you would get $7,500)
C. Yes see above
D. Not sure about D
In regards to Nickel’s comment earlier, the new provisions in this amendment allow the credit to be amortized from the point of closing, meaning that the money will be available to the buyer at or around closing.
Rebecca:
a) While it’s still up in the air, the new credit would allow you to either amortize the credit and make it available at the time of purchase, or else you could take the credit on your 2010 return.
b) This is not a tax deduction, it is a credit. It has no bearing on your tax bracket.
c) If it holds fundamentally to the credit from 2008, then yes, it can be used to offset federal tax liability.
d) The credit is not based on your total withholding. It is based on your total income and the purchase price of your home.
Hope this helps.
I have tried to find the answer to this whole tax credit business but to no avail, so I’m hoping someone can answer this question for me.
In regards to the new information of an $8000.00 tax credit, I’m looking for clarity on what I think this means to me – a potential 1st time home buyer
A. Is this an amount we will get back in next years taxes if we purchase a home?
B Is this an amount we can deduct off our taxable income to put us in a lower tax bracket?
C. Is this money we can deduct off our federal tax amount if we have to pay in to the government on our taxes next year so, for instance, if we owe 10,000 then we only pay in 2,000?
D. Is the amount of refund based on how much was withheld and if less than 8,000 was withheld then, how much money would we receive?
Can someone tell me where to find the information please? All I can find are a couple of sentences on it.
I’m not so sure that buyers who purchased in 2008 will be paying back the credit. As I have read it, the current bill is being amended. This is not a new bill. That being the case, the original dates (April ’08 through June ’09) may hold true for the purpose of determining the payback provision. We’ll find out soon enough, but I’m not convinced that it won’t apply.
Yes I understand that and I agree with you on the fact that people who cannot afford it should not even consider buying a home in the first place. Why people commit to something they cannot afford is beyond me but you know as well as I do that many are looking at the refund, that yes comes after you file, as something that is going to entice them to buy whether they can afford it or not for the long term.
Hailey: You knew the deal when you bought. Is it fair that we bought our house before this whole mess started and got nothing? Nope. But this isn’t about fair. This is about spending money to stimulate the housing market going forward. They’re dangling a carrot in front of would-be buyers. You already bought, so what sense does it make to sweeten the deal for you?
Hailey: People who bought in January 2008 got nothing… is that fair?
I bought my house May 2008 and if I understand this correctly I will have to pay the 7,500 credit back but new buyers this year get 8,000 and do not have to pay back. That just doesn’t seem right
nickel,
I know you will have to wait until purchase to receive the credit, but won’t you be able to go back and amend your 2008 return to get it sooner?
In my (possibly unpopular) opinion, if people can’t come to the table with 10-20% of the purchase price in the form of a downpayment, then they shouldn’t be buying a house. That’s what got us into trouble in the first place. Also keep in mind that this is a tax credit, so the money won’t be available at the time of the purchase. You’ll have to wait until you file to get your hands on it.
what i meant by that is first time homebuyers who are now considering buying a home have to come out of pocket more than say someone who didn’t have to come up with a downpymt or a signicant amt for closing (up to 6% of the purch price). the tx market has not been affected by it as much as cali, az and fl but my example is pretty accurate. the 7500/8000 is a great incentive but NOT EVERYBODY has 15k to bring to the table especially in these tough times.
Heidi: Are you serious? It’s not a buyer’s market? Supply has been far outstripped demand. That’s the very definition of a buyer’s market, and exactly why housing prices have collapsed. If the seller’s are in the driver’s seat, then why aren’t houses selling?
I have to agree with Dustin the credit will be used to furnish/add to/or repair the home more than likely, so it will be going back to the economy.
I’m sure those who did buy a home a few years back got deals like $0 down but NOW you have to have at LEAST 3.5% for a downpayment + closing. It’s not a buyers market, sellers will take advantage of the 7500 or 8000 credit and make it harder for a buyer because they’re expected to come up with 3.5% AND ALL of closing….on a 150k home that is 14,250 at closing!
The whole point of this is to jump start the economy. I think most homebuyers will use it for that purpose.
We are closing on our home in April and this seems to be great news. Of course bearing it actually gets through to the President’s desk.
This credit is obviously going to make a lot of people mad, but it will help a lot of people and the economy. The money we get will be going right back into the economy in ways of furniture, appliances, and a patio. The exact goal of this credit.
One of the things I find most frustrating (and there are a hundred things I find frustrating about this ridiculous pork bill) is that all the so-called ‘tax breaks’ are going to people who are not the high producers of our society, and who have helped cause this mess with their bad fiscal decisions. Meanwhile, as homeschooling parents of three kids, who live within our means, and small business owners, none of these breaks will be coming at me and my husband at all. In fact, the Bush tax cuts will probably be done away with by this administration and legislature. I see more bad behaviour being rewarded, and more ingenuity and hard work being quashed and penalized. Anyone else out there feel Atlas shrugging?
So what does this mean for me who purchased my first home in May of 2008?
Am I still eligible for the $7500 “loan”? If so, do I need to file before the new bill goes into law?
Unused tax credits usually roll over, so even if your tax liability won’t be >$8k this year, you should be able to roll any unused credit forward to the next year. Generally this can only be done for a couple of years.
While this little “stimulus” does tempt me to buy a house, we will not be financially ready to do so anytime this year. I don’t really like the idea of being locked in for 3 years either.
Your household income also has to be relatively low, I think its under $150k to be eligible for the full credit.
“I also think it’s crap they aren’t grandfathering in the $7500 from last year. Those homes were bought in a recession too ya know.”
What about homes that were purchased between Jan-April, they were purchased in the same time period also? Why not just give everyone that asks nicely $10,000 to make them happy.
Why should my tax dollars, and future tax I pay go to helping these people furnish their houses after they buy them, nobody helped me out.
Why does it seem so many people feel the entitlement to this money for buying a house? It seems like they should do the same as others and pay for it with the money they earn over time.
I am also wondering how many people don’t realize that the money they get back in a tax refund is not because they owed no taxes, but that they paid too much in taxes, I didn’t realize this was so mis-understood by people. I paid close to $11,000 through paycheck deduction, but my taxes that I needed to pay was only close to $9,500 so I got a refund of about $1,500, that still means that I paid $9,500 in taxes this year even though I got money back from the government. If I were to get this I would have $9,500 paid and would get up the $8,000 without an issue, I suspect most people commenting are paying some taxes and just not looking at the numbers correctly.
I am also curious if it is refundable.
I agree that it is diametrically opposed to my political paradigm. I think it is a bad decision that will encourage more bad decisions. I also think it will make sellers less likely to bargain.
That said, I close on my first home in March – I hope my timing was right!
total and complete horse squeeze. This is only going to encourage BAD home purchases or people to buy a second home who are not necessarily impacted by the current economic conditions.
I envision more home sellers sitting on properties and working with agents to use the $8k free money as a bargaining chip.
I also think it’s crap they aren’t grandfathering in the $7500 from last year. Those homes were bought in a recession too ya know.
Is it refundable?
Edit: I would guess it would have to be if it is similar to the first one. To have owed $8000 in taxes, you would have to have a pretty impressive AGI.
this doesn’t go into effect until the president signs the bill, right? Also anyone know when that may happen?