First Time Home Buyer Tax Credit

There has been a lot of talk (and confusion) about the economic stimulus bill and what it means to home buyers. Who qualifies? What year can I claim the credit? How much of a refund would I get back? What are the criteria to receive the credit? So I'm going to attempt to answer the most common questions about the bill. Keep in mind, I am NOT a tax professional or accountant and always recommend when it comes to your taxes to seek the advice of an accredited tax professional.

That being said, the bill states that first time home buyers can claim a tax credit worth $8,000 OR 10% of the home's value, whichever amount is less. So, if you bought a condominium for $65,000, your tax credit under the bill would be $6,500, not $8,000.

Qualifying

In order to qualify for the credit, the home purchase must be made between January 1st and November 30th of 2009 (so if you buy a home on December 1, 2009 you are not eligible). In addition, there are income restrictions as well. To qualify, a single person must make less than $75,000 a year. Married couples must make under $150,000 a year. However, higher income buyers may receive a partial credit. You must also live in the house purchased for at least three years or you will be required to pay back the credit. The property being purchased can not be owned by a close relative like a parent, grandparent or one of your children. The definition in bill for a first time home buyer is anyone that has not owned a home in the last three years.

Tax Filing

The credit can be claimed on your 2008 or 2009 income taxes. Now as I said you can claim the credit on your 2008 tax filing. If you have already filed them, you can file an amended return to claim the credit if you wish to do so. Based on the feeback we've been getting, the process takes about 12 weeks. Another great thing about the credit it that it is fully refundable, so even if your total tax bill (refund) is less than $8,000 (and you qualify for that amount of a credit), you would still receive the full $8,000 back plus the amount you had overpaid.

For example, John's taxes showed that he had paid $5,000 in taxes over the year. He filed his return and he actually only owed $3,000 in taxes. Normally he would have received a refund of $2,000. But under this bill, he would receive the full $10,000 instead! To claim the credit on your taxes is just a matter of filling out the form, without any additional paperwork involved.

This is a simplified breakdown of the economic stimulus bill. I highly recommend consulting a professional tax service regarding your taxes. You can download the tax form here: http://www.irs.gov/pub/irs-pdf/f5405.pdf

Thank you for reading our real estate blog and feel free to contact us for all of your Las Vegas NV real estate needs.  

Source: CNNMoney.com

Comments

IRS is delaying on purpose

Considered a first time home buyer since I sold my house over 3 years ago.
Had HR block do my taxes which I thought would eliminate any problems.
19 Feb 2010 mailed in everything to INCLUDE the HUD statement.
23 Mar 2010 IRS website stated received and expected return 27 Apr 2010.
6 Apr 2010 got letter they need the HUD statement.
9 Apr 2010 faxed in HUD statement.
Called evey week with no update in the system, told wait 4 weeks.
2 May 2010 still no information.
***Like everyone here you expect your return in a timely manner. I expected a return in the 6 to 8 week period so I let bills slide thinking the check will soon arrive around 27 April. It figures I would like many of you get the short end of the stick. Now I am behind several bills and have no way to catch up. Thanks IRS for delying everyones money for thier own benifit. I think that the longer they hold it the more they make money on your money. I got audited last year and I believe it's cause they are looking for ways to make money. I wonder how many have been audited? I see many of you getting paid interest just makes you wonder what amount of money was made on your money. What are they giving you 10% of what was really earned with interest? So here we are with no way to fight them. File your taxes, fax off information you had already sent, delay your return another 6 to 8 weeks and possibly you'll get a check. I expect mine sometime in June now. I am not holding my breath. Funny if you owe money THEY will get it. Maybe we should all claim more exemptions and leave them with less money. That wouldn't work cause they would create another tax or raise them. We can't win can we?

Tax return

Boy I read your post and to my amzament we have the exact same dates down to when I faxed the information. But now when I call they tell me they do not even see my filling. I was told that they send a message to the department that is handling them and asked someone to call me................... But I have to wait 30 days to see if they call me. This is just to much the home owners tax credit is only one part of our return. Why can we not have the return minus the home credit and then it would not be so bad that we had to wait for the rest of the money. I just hung up the phone and the man told me he is showing a that it might be released next week. I will keep u posted.

I can't believe this, I'm in

I can't believe this, I'm in the exact same boat. They said to re-mail Hud-1 which was for sure originally included. It's now may 22nd and still no update. WTF! I got my state return two months ago. I truly believe that they are intentionally delaying the returns for some reason. My wife's friend is a accountant and she said 16 out of the 18 people she filed for the home buyer credit still haven't gotten it.

We had the EXACT same

We had the EXACT same situation happen to us, almost to the date. April 9th we faxed the HUD statement and have called every week since. It is now May 19th and they still can't even verify that they recieved the fax... We have NO idea when we should expect the refund now.

Ditto

Same story here. I filed early, first week of February. I got the same letter requesting my settlement statement. It's now been three months, so I gave them a call. Only explanation...wait ANOTHER six to eight weeks and no other explanation other than they are just busy. So we're talking about a potential FIVE-month wait on an automatic deposit!!

What's the recourse here? It was only after I made a stink about it that I was informed they would pay interest for late refunds. But she was clueless as to the interest rate or what period of time they consider an "unreasonable" delay. Does it really do any good to voice our disgusted opinions on all things government anymore? I'm so exhausted by the hypocrisy of it all, especially considering the fact that I owed them a penalty (because of false info they gave me, btw) and they expected payment immediately, which they received. Can I say I hate the IRS enough?

I closed on my house October

I closed on my house October 23rd of last year and immediately went to H&R Block and filed for the tax credit sending the IRS all required documentation. I started calling the IRS weekly at the 6 week point and was being given the run around to call back in a few weeks. Fast forward to 12 weeks after I originally filed and I get a letter stating that they want documentation, most of which I had already submitted. I gathered up all the documents and sent them off within 3 days of the letter. Its been 9 weeks since then AND I'M STILL WAITING!!!!!! It has been a total of 25 weeks so far and according to the the last phone call, I'm going to be waiting another 6 weeks(which we can all assume to be a load of crap) or almost 8 months since I filed. All I really want is to be done with it. I couldn't even care less about any interest. I would've much rather been given my money months ago and they could shove their interest. As my name states, this has been an absolutely disgusting process.

Same story to a t, right

Same story to a t, right down to the dates that you were expected to recieve the first time. I'm so mad. I wrote my congress man and I think everyone else should too. Maybe they will hear us if we roar loud enough. So its May 9 2010 and I still don't have my refund. I think its time that they start paying out interest to me. Mothers Day and I'm worried about my refund, Thank you IRS for complicating my life.

you think that is delay get this

I filed for 1st time hombuyer sending in all that was stated was required at the time. It was received by IRS Dec.2nd today is May 9th and I still don't have my refund. They have requested documents for proof of residence which they didn't request until March. I sent the info right away by fax and they received it on March 29th. Now I'm getting the same answer 45 days so on May 15th if I haven't received anything I can ask that they check on it and find out what the hold up is.
I just hope they are paying interest on this, they certainly charge us interest if we owe them money, right?

Im in this very same

Im in this very same situation and time line frame as you

why would you let bills fall

why would you let bills fall behind? If you bought a house counting on the $8000 to keep your head afloat than you are part of the problem, not the solution.

same for us

mail ours jan 30
received by irs march 23
got a letter asking for more paperwork april 9
faxed them the paper work april 9
tomorrow is 4 weeks to the day and the irs still say its not in there system to fax it again and wait 4 weeks again.This is just crazy.

Refund delay

OMG!!!! it sounds exactly like what happened to me. I have been trying to call the IRS every week and the system hasn't been updated everytime I call I get a different answer. I have waited 3 months for my return and nothing yet. Who know when I will get my return. I have a house with no furniture waiting on my money.... I think that will be a good idea and claim more since at the end of the year they don't give you money anyway.

15 weeks and counting.....

Totally frustrated but I have to admit a little relieved to hear all these responses about all the run around. Relieved because I was begining to think that my return was lost somewhere in in the IRS system and that's why I wasn't getting any updates and it was just me! Similar to the above, I've been waiting almost 4 months for my return and getting nowhere with the IRS reps on the phone! I filed in late January after closing in mid December. Nothing was posted to the IRS site until early March saying I would receive my refund March 30th. Then March 22nd I received a letter saying that I didn't turn in my W2's (yes, my bad...I usually e-fle and in my haste to get everything in asap, did not send my W2's). I called imeadiately to see if I could fax to somewhere rather than mail, and was told if no number was listed then I would have to mail it, which I did in the return envelope sent with the letter and hand delivered it to the mailman that same afternoon. 3 weeks later I started calling again and kept being told there was no update and was told to call the following week for the next 3 weeks until I was finally told that there was a note in the system that they never received the documents and that the process had been moved on, but they did know where to. I have asked to speak to supervisors, been hung up on by one rep for asking to speak to a supervisor, and after putting in a complaint to another rep to have a supervisor call me (apparently takes 24-48 hrs) I still have not heard from anyone 1 week later!
Last I was told they were putting in a request to another department that should be able to help me, (because they finally realized that 14 weeks was a rather long time) but was told it can take up to 30 days to hear from someone!
Oh yeah and for some reason every rep I talk to has a little more information than the last, even the same day. So why do they all tell me they have the exact same information and that what they've told me is all they have??? This is beyond ridiculous!

late Bills

being behind on your bills is a personal problem. Don't blam the government. I filed my taxes with H&R Block and they told me the IRS wasn't going to issue Tax Credits unltil late May at the earliest. Point being, you should not spend money you don't have. It is irresponcible on your part to do so.

P.S. I am still waiting on mine too. I am going to buy a newer vehicle. I could finance it, but I am not spending the money until I have it.

waiting for 2nd time homebuyer credit

We are waiting, and we could use the funds to help stimulate our bank accounts:).
We filed in feb 2010. The website said finally in april we would recieve the refund. The IRS sent out a partial refund in early May. They withheld the 6500.00 for the credit. Now, they say that they sent a letter on Monday requesting more information. I am curious. what else could they want? I sent everything I could think of down to the building permits!! I will have to wait and see. It said call, and use refence code 1241. I looked this code up, it said return under review, with e-freeze. whatever that means. Oh, and for all of you people out there that feel like they are some sort of authority over everyone else, saying how irresponsible the people are that want their money, you must want it too, or else you wouldn't be on this site. You wouldn't be googling for information if you weren't hoping to get it soon.
It is true, why did the gov offer this incentive, only to make people wait forever, and keep asking for more information.

We too, are entitiled to the

We too, are entitiled to the first time homebuyer credit. We too, have received various codes, starting with 8001. None of our income is taxable (Social Security) so our return was straightforward, yet we had a registered agent do it. We filed on March 23, 2010. Finally, hardship sent us back to our agent (our well started pumping mud). He got a taxpayer advocate for us. She had us fax everything that we had already sent in, directly to her. With hope, we check the IRS.gov website everyday, only to find that last night it was changed to code 1241, which if you research it is an "E Freeze" related to lack of full payment of past taxes. We don't owe any taxes that we know of. I'm 58, husband 69, fully disabled. So, if you have figured out what 1241 means, please let me know.

Thanks.

If you're going to talk crap

If you're going to talk crap to someone, please learn how to spell irresponsible....

Responsible is spelled with

Responsible is spelled with a "S" not "C"! LOL!

I DO BLAME THE GOVERNMENT

I DO BLAME THE GOVERNMENT they shouldn't just sit on other peoples money.
Im sad to hear about the problems. you guys are right... if you owe the IRS they will get theirs .. and as soon as they can..
they always talk about big businesses at least you can settle a debt with private companies....
.the government IRS/ STUDENT LOANS they want every penny and they don't usually settle anything...
so who is the worst.. its the government they are sooooooooooo crooked. and as far as having a personal problem... yes its more than a personal problem our government prints out money for their crooked friends all over the world and we the people who pay state taxes local and federal taxes we are last on the list to get paid ...we get the shaft so right now the money might not be in our hands but they need to get it to us ASAP...I do blame the government they are INCOMPETENT in most all areas.

Rude

Oh yeah and learn how to spell, guru of finance.

Some People

Who is this person giving advice about when to spend money? Sounds like someone's needs to stop insulting people and look in the mirror. You are gonna finance a car? With your tax credit? Hope its a Toyota Mr./Ms. rude. So you don't spend money you don't have wow you're the best, you must live an exciting life. Why say anything if you are gonna be rude?

You make a good point but are missing the big picture

The whole reason why this tax credit was created was to stimulate the economy.
I know the President wants that money in the hands of the consumer and the sooner the better. This is not like a rebate from a mfr. this is debt relief and hope for many hard working people.

Firstly, you need to learn

Firstly, you need to learn how to spell. Secondly, it may not be someone's fault they are behind on bills. I just went back to work after being out of work for 1 year. We also need our tax refund to pay bills.

RUDE!

Yes, we all get how mature and responsible you are, even without the added p.s.
Do you feel better about yourself now? People come to this site for many reasons; venting, commiserating, helping, learning, but usually not for criticising. I think we all can agree whether one is rich or poor here, $8,000 is a welcomed friend. We all do things we regret at times like holding off on a couple bills because you thought that check was on it's way,it isn't the best thing to do but LOTS of us have done it, I know I have. We all live and learn, we have no right to judge anyone. Even if I thought purchasing a vehicle with your refund is a dumb financial decision, I have no right OR need to bombard you with nasty criticism, it's mean and shows no class. If you came to this site you were concerned about that check, just like the rest of us,so do me a favor and step off that pedestool.

Not rude.. He's right!

You say this site is not to criticize, yet people are blaming the IRS for their own problems. I think the previous post about a personal problem is entirely true.. One should not put so much financial responsibility on money they don't have yet. And truthfully the tax credit will only be a temporary solution if they hav financial problems like that.

amen

amen

Agreed! Rude folks go away! Having the same issues guys....

Completely agreed! You seem like an absolute winner for bashing someone over the internet. The mere reason we are all on this site is to inquire about a common problem; where is my credit? Therefore we do not need to here some inconsiderate D-bag's opinion on appropriate budgeting. Quite frankly it is not my style but you definitely don’t have your head on straight if you plan to spend your credit on a new vehicle (something that is going to depreciate substantially as soon as you drive it off the lot). Therefore like others have told you, you need to get off your high horse and read a book about investing and money management. Take your $8K and throw back into your property. i know we are all on edge here because most of us are counting on that money for something. Like others, I have a complete remodel scheduled and can not move forward because the IRS feels it appropriate to be leisurely about mailing me my return. It seems quite ridiculous that in a country as esteemed as ours, the IRS infrastructure does not even appropriately update itself to at least give us a heads up and put our minds at ease.

Like most of you I filed in January/February of 2010. I have already received my federal and state returns via direct deposit. Yet I received my letter from the IRS saying they require no additional information, in addition to the website saying "We are currently reviewing your return." I am waiting on a nearly $7K check! That should be enough to at least get my bathroom done. Well good luck to you all. I hope you guys receive your money soon.

(standing and applauding)

(standing and applauding) thank you so much! You know that guy works for the IRS and he just hates us.

Don' t be jerks

This site is to talk about the IRS problem with getting returns, not to be snippy jerks and tell people they have a personal problem. The IRS has caused many problems for many people and you don't know what specific circumstances show up out of no where that make people behind on bills. If you want to write on here about your IRS grievances, go ahead...but leave personal, rude, snobby remarks to yourself.

It is common sense

While the first poster was blunt, its also frightening to see the number of posts on here concerning people falling behind on bills and relying on this tax credit to afford things. I understand that people are relying on this rebate to do some repairs, buy new furniture, get new appliances, or even pay bills (assuming credit related bills or something that wouldn't be recurring), but falling behind on those bills is not the government's fault. Would you still have purchased the house if you weren't getting the money? It is one thing if the money would be a boost in assisting you in upgrading the house or paying off some debt, but its another if you have already spent the money before you get it or are relying on it to stay ahead of your bills. If you are in that situation, you brought it upon yourself. Don't buy something before you have the money for it, and don't live outside your means. You can call it rude, I call it common sense.

Anyway, I purchased my house on March 19 of this year, sent all the paperwork out the next day, and I am still waiting for my rebate. I called two weeks ago and I was told that they were mailing out my check on the 21st of May. I sent in my signed HUD statement and all the required tax forms--I had already filed my 2009 taxes, so I had to send in forms to adjust my previous return. I never got mail from them stating that they received anything, but the guy on the phone assured me they were mailing out my check. Hopefully I will have a nice surprise in the mailbox sometime this week!

HUD-1 Missing? Not so.

I had the same thing happen. Same timeline and everything. I had to mail in my return due to the fact I was getting the "First Time Homebuyer's Credit" and had to include my HUD-1 Settlement Agreement. I even FedEx'd my 2009 return so it wouldn't get lost only to get this BS about me not including this HUD-1 statement, which in fact was included.

I think the Feds are scamming the American people and trying to hold on to the money as long as possible.

Oh and btw. Their fax number does NOT work. Tried faxing all morning only to get errors on my fax report. Going to post office to "Express Mail" it at lunch and see what happens. So frustrating!

first tme home buyer credit

when you buy a home you have to close twice once on the contrution part and that is when you pay the closing cost. and once when the house is done could you please tell me when can you file for the credit.

You can file for the credit

You can file for the credit after you home is constructed. You have to be in a legal binding contract by May 1, 2010. They are going to ask you for the legal contract and an occupancy permit.

section8 and first homebuyer credit

i know someone is on section8 and bought for the first time a house, is he eligible to get also the tax refund for first homeowners?

Yes. The two programs are

Yes. The two programs are not connected. I'm assuming your friend used the Section 8 to Homeownership Program?

i bought my house and closed

i bought my house and closed end of march 2010. was given my HUD-1 on the morning of march 30th, 2010... so i did my taxes later that day. i made of copy of my HUD-1 statement, and mailed it in with my taxes. two weeks later i checked the "wheres my refund" on irs.gov. still no update. checked it again a few days later. said that if there were no errors, it should be processed by may 15th. checked it two days later, the date went back and said may 25th. checked it AGAIN on April 26th.. and it said that they processed my refund and that it will be direct deposited into my account on April 30th, 2010. so this morning, i wake up and check my account. my full refund (tax refund and fthb credit) was deposit. (total over 9300). so it only took three weeks for my refund. it was really fast, and easy =]

closed 3/30/10

We closed on our house the same exact day march 30 2010, we went to tax lady that evening and we sent forms out that evening as well along with the hud1 paper. i have been checking where is my refund since 4 weeks of being at the house. it has said every time no record, and i just checked ti today 5/17/10 and still is has said nothing, it says they can not find it. that i must have put something in wrong but i didnt

hi

i am in da same situation as u we clsd on march 26 2010 amended ur tax on march 31 2010 we hvnt rececd ours yt n its thru mail hw cum u got urs directly at ur bnk?

He got his so fast because

He got his so fast because his wasn't amended. He just waited and did his taxes later. I'm in the same situation as you I closed in late February mailed my amended return on March 15. I called the IRS and the rude lady on the phone told me it takes 16 weeks to process, so I'm not getting mine back until around 5 July.

You only get it direct

You only get it direct deposited if you file it with your original return. Ammended return refunds will always be mailed. Thats how mine came even though I electronically filed my original. Even on Wheres My Refund? It will tell you it is going to be direct deposited. but that is actually your mail date. Mine came in the mail May 4th and the site said dd on apr.30. The IRS will not tell you this for some reason!

Fingers Crossed

Called IRS this morning to inquire on the status of my tax credit and was told it is going out in the mail today (04-30-10). Hope the representative knew what she was talking about. Will update you. Good Luck with yours!!!

Home Buyer Tax Credit

I would sincerely like to know what is going on with your refund and if you receive it. I have been waiting three months now and still I keep getting the run around

What number did you call?

What number did you call?

Finally!!!! I received it in

Finally!!!! I received it in the mail on Monday, May 3, 2010. Now I'm just waiting for my bank to release the $3000.00 they delayed upon verification of funds. Good luck!!!!

Anxiously waiting

I am a single mom who closed on my house on July 21, 2009. It didn't realize that I could amend my 2008 tax return to file for my $8000 first time home buyer credit until it was brought to my attention when I called H&R Block in the beginning of January, 2010 to set up an appt for Feb to have my taxes done. They suggested that while I wasn't ready to do my 2009 taxes yet, I could come in and have my 2008 amended so we could start to process of getting my tax credit refund for my home. My amended return was sent in on Jan. 11th with the HUD settlement statement from my closing attached. It was confirmed by the IRS that
they received it on Jan14th. When I called to check the status mid Feb I was told it would
take 8-12wks, then when I checked again in
March was told 12-16 wks. I just called on /27/2010, now 15 weeks and was told I'll be
eceiving a letter form the IRS within 30 days
equesting more information from me but they
couldn't tell me what they need. My concern is
hat in 2007 I had a $800.00 debt forgiveness
om a credit card co. I didn't know at that time
needed to claim it as income on my tax return. hope this wouldn't cause my first time home
ner tax credit to be denied, I could understand
if it was adjusted and reduced. If
anyone knows how this would be dealt with I uld appreciate your input.

IRS Tax Credit

I've been waiting 6 months. I sent in my 2008 amended tax return on Nov 3rd 2009 with all the necessary paperwork for my Tax Credit. I'm still waiting.... I ended up contacting my US Senator for assistance we'll see how that goes...

I received a letter a couple

I received a letter a couple of weeks ago they just requested stuff like more proof that you live in that house. They requested things like copy of Driver's License showing new address, car regristration with new address, copy of my mortgage statement, closing statement, and a couple of other things, I sent them in and just got a letter yesterday they approved my credit and I will get my check in 6-8 weeks. Good luck hope you get yours soon I also closed last year Aug 12, 2009.

I got it

Arrived at the IRS with my 2009 return Jan 18th, received part of my refund Feb 26th, got a letter from them dated 3/15/2010 wanting more info. If you haven't filed yet, send more info from the beginning, I know they only ask for the 5405, and HUD-1, but send a copy of your DL with the new address, checking statement with the new address, car registration with the new address, etc. They will ask for it, I faxed the info back Mar 18th, was approved April 15th, what a great day, Tax day,! DD on 4/30/2010, even though wheres my refund said 5/07/2010, actual phone rep told me 4/30, so I was expecting it. The money will come, send the extra info anyway, and follow-up every week.. I wish you success!!

phone number

So do you still have this phone number you had success dealing with IRS people on? I think every one of us looking at this page would like to ring it. Thanks, Mike

first time home buyer credit

I sent in my taxes with Hud statement and everything needed. January 15. They then sent back to me March 15 saying they did not receive my HUD statement so I went to HR block and it showed i had sent in everything, but they recommended I hand deliver my information to the IRS on Liberty here in Bloomington, and so I did and they overnighted it. It is now May 4, ? When should I expect it?

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