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

I think it might be the same

I think it might be the same as a "married couple filing separately"....you be eligible for half of the credit.

Only if hes willing to deed

Only if hes willing to deed the house to you and you take the mortgage out. This is the reason why its taking people who really are 1st time homebuyers to get their credit. This is considered fraud my dear. Why would you want to do that anyway?!

FTHC

That answer is incorrect. When 2 unmarried individuals purchase a new main home, they can decide how to split up the credit using any "reasonable method". A reasonable method is any method that doesn't have someone who is not eligible claiming the credit. If you're eligible and he isn't, you can then claim the entire credit. Check the instructions for F5405.

tax advocate

Can someone here tell me how to get a tax advocate? Many thanks.

Advocate

You can call to get an IRS advocate at 877-777-4778.

The way I received the help

The way I received the help of a tax advocate was writing my Senators and congressmen. The only one who replied is up for reelection this year. Purchased home September 11, 2009 of all dates. I should have known it was going to be a disaster.

Looking for some info

Hello to all,
Purchased home late November,sent forms in. Not being aware that homes purchased after Nov 15 2009, had to wait until after December to file. They (IRS) sent the forms back
& I waited till mid-January to resend. Did not get any kind of word, so I called late March to get status. Informed my credit was being denied. Person I spoke with said I would get a 105c letter stating my denial in about 20 days. Has anyone gotten this type of reply? Should I contact an advocate or wait until this letter arrives? If anyone has some insight,feel free to post up. Thanks.

info on letter 105c

Hello. Did you get that letter 105c for denial from the iRS and the homebuyer tax credit? what did you have to do?

We have just been told that

We have just been told that our home buyers credit was denied. We filed Jan 23, we even overnighted the forms to the Atlanta IRS office. Everytime we checked on the status the expected refund date was moved further away, this happend 5x. Today we wake up and wow, there's our fed. refund in our bank, MINUS the housing credit. Now we are told that they will be mailing a form in 10 days that explains why. This is the biggest crock of shit ever. Nice of the gov't to entice us all to buy homes, then yank the promised money away.
I called our accountant (yeah, first time ever I have paid someone to do my taxes) and he couldn't get any info either. He said we needed to wait for the letter to arrive, the bring it to him and we could take it from there.
Sorry everyone else is having problems, but it's nice to see we aren't alone!

Still waiting

I purchased my first condo in Oct of '09. I submitted my '09 taxas at the end of Jan. I included my HUD- Settlement statement with my tax returns. I checked, "Where's My Refund?" and I was told that I would receive my check on April 6. However, I received a letter last week from the IRS, which stated that I needed to provide my W2 to verify federal witholding, plus they asked me to submit, the HUD-Settlement statement..which I already sent in a month ago. So I faxed over my W2, plus the HUD-Settlement statement, now they said it would take approximately 6 to 8 weeks to process the documentation. I used a FHA loan, and the "government" already has the documentation!!!! The federal government has a very checks and balances system....Why do I need to submit a W2 when the government already has access to how much money each citizens pays in federal taxes...so I am planning to wait atleast five or six months to get my refund.

I finally got my check!!!!

I submitted my federal return at the end of Jan, and I received notitication at the end of March, which stated that I needed to send in my HUD- Settlement statement, plus 2009, W-2 form. I was informed that it would take 6-8 weeks to process my information. I was pissed, and I called the IRS to complain, and I was told, I should expect my check, in early July. Fast forward, I checked my account on Fri, and my refund was deposited into my account. In total, it took them approximately three months to process my refund, much faster than some of the horror stories that I've read on here.............I'm so happy, the madness is OVER! Good luck to everyone!

6 Months and 1/2 refund

My wife and I got married on March 2008. We closed on our house on June 20th, 2009. Waited for some time for the credit hype to slow down and called the IRS in October 2009 to ask about 5405 form and how to handle the credit on our 2008 returns.. The law adviser told me then that because we bought the house in my name that I would have to file 2 1040X returns, one showing half the $8000.00 credit in my wife's name, the other in mine. Mailed forms out on October 15th. IRS waited till December 5th, 2009 to mail me a notice that because my wife was a dependent in 2008 she could not claim the credit. Another no biggie. Filed our first Joint return on Feb 19th, 2010. Just received another letter today , April 2nd, 2010 that we forgot to provide the HUD-1 documentation. Another no biggie. Called in to IRS just to verify that that was all that was needed. After spending the 25-30 mins on hold and another 10 mins to explain to the guy he says that we won't be able to get the remaining $4000.00 because I was suppose to file the entire $8000.00 in my name only. I think the law advisers make some ficticous rules just so they don't have to give you the credit. God I love democracy...

still waiting in Virginia

We have been patiently waiting since October for our tax credit and finally got an approval this week. I spoke to an examiner and she informed me we would get the refund on April 24 which strangely enough is my husbands birthday...Happy, happy, joy, joy.!!! Then we got an official letter in the mail from the IRS stating again we had been approved but the check will not be issued for 6 to 8 weeks. Sad again......it just never ends.

Finally 7 months later

We filled our amended return back in Sep 09. i Called every two weeks to the IRS and was always getting the run around like everyone on here is saying. Finally i got fed up and requested a tax advocate at the beginning of March. My tax advocate was a pleasure to work with. He was on time with everything he told me sometimes even earlier. It took the advocate less than a day to contact me when i requested one. He told me to wait two weeks for him to look into the situation and he was calling me a week later saying i was approved and to wait another week for the release date for my check. The following week he called with our release date and we recieved our check just a few days ago with interest. Good luck to all still waiting on amended returns from 09. My suggestion is to request a tax advocate it worked for me (hopefully you will get the man i spoke with he was out of the kansas office).

Originally Filed November 19 2009

I originally filed the 5405 on November 19 2009, only to have my credit denied in December for a new revision to the 5405 that wasn't even going to be out until late December. I then filed an ammended tax return against my 2009 taxes on February 9 2010 and finally got an answer on March 30 2010 that my check would be mailed on April 9 2010. Guess it's a pain, but I'll be happy when I get the check. Did anyone who received their credit get interest with it? Or was it for the flat 8000?

IRS mistakes

I sent my 2009 return in with FTHC in Jan. 25, checked Where's my refund periodically till March 2nd, Finally decide to call in and Mr. Holmes says they have all my forms except 1040 form....so frustrated to how my main tax form is lost...i fax it in with other forms just in case i.e. EIC, 8812, 5405 + xtra docs. etc....sit back and wait, where's my refund changes to April 13 so I'm a little excited, then I get a letter in the mail March 27 saying they need my forms EIC, 8812, 5405, etc.... so now i recopy all those forms again and mail 'em in.... waiting game. I just don't understand how my forms get misplaced twice, either mailed in or faxed. Aren't these people professionals? Somebody should be held accountable for this.

me too!

I was told to expect my direct deposit refund by APRIL 13....I finally got hold of someone at IRS yesterday and they were surprised I didnt recieve my letter yet stating there is missing paperwork?
We sent everything, signed everything on Feb 23, 2010...Then I called H & R Block and asked them what could be missing and they said.."Its a Game"..The IRS claim they lost the paperwork and its most likely the 5405 form because 2 other clients were done the same way.
I'm not getting any $8,000 tax credit, I payed cash for my property so I'm getting refunded on the percentage on the cash price I payed.

*update to IRS MISTAKES,

*update to IRS MISTAKES, Where's my refund now says should receive by May 11, 2010...lame still think i'm gonna call for an advocate.

Any advice??

We bought our first home in April 09, filed an amendment in May and didn't hear from the irs until Nov. Saying they needed more info which we sent by certified mail, only to be denied because our property was givin to us from family. When I called to ask about that they said they needed even more info which we sent certified mail, only to get a letter from them in Nov saying we didn't send information previously asked for and now they have closed our claim with a denial....

Call the IRS and get the

Call the IRS and get the phone number for the Tax Advocate office in your area. We sent in our amended form and it was received July 21, 2009 and we NEVER received one piece of paper from the IRS. We kept calling and calling and they said that they had mailed us a certified letter and we only had 30 days to respond or we would be denied. By the time I called again, WE WERE DENIED because 30 days had past - but how would we know? We never got the letter because they mailed it to an address we had lived in two years prior! Once we talked to an advocate, she was wonderful. She figured out the problems and she stays in constant communication with us. After waiting 9 months, she says our check will be mailed April 9, 2010 - this Friday with interest. Total is about $8,311.00.

Get Over It

Everyone just needs to get over the time period. If you bought a house 'needing' that $8000 than you spent poorly. I understand, you want your money, but the IRS can take as long as they want to. Plus, there were several people who claimed to buy a home but did not, so they have to be a lot more careful checking these things. We all have to pay these refunds back in taxes one day, so be thankful if you are able to take advantage of this, and thankful that they are taking their time making sure you actually purchased, because do you really want to pay for people who didn't buy but still got $8000???

You'll get it when you get it and be thankful that they even did this. And you will have to repay it in taxes one day anyway, so simmer down!

guess you are and IRS

guess you are and IRS worker. No one Owes us this but it YOU say 12-16 weeks or even 16-18 weeks 9 month is longer but I wouldn't expect you to know that because probably like most IRS workers you can't count

We have to wait and simmer

We have to wait and simmer down? the damn IRS has to be paid by a certain day but when we do our due diligence they are allowed to pay us whenever??? what a crock. I dont NEED my 8 grand, but i WANT my 8gs, so if the govt can give billions away in minutes y do i have to wait til they want to pay me???

get over it

You better believe that they wouldn't wait arround for Joe Blow to pay his taxes.They would be putting leins on all he had to get their money.If people just "simmer down" they get the message that they can do whatever they want.

You need to get off this

You need to get off this blog, nobody wants to hear your opinion. If you don't have anything helpful to say, please just shut up.

Easy for you to say

You obviously work for the IRS. These people have the right to feel any way they want to feel. Also it doesn't matter whether these folks "needed" their money or spent "poorly" as you put it. Who are you to criticize? Just make sure you have the patience of Job while waiting for you refund which you'll have to pay back on day as you so nicely put it.

Yea either that or he got

Yea either that or he got his when he was suppose to. =-)

A bunch of crap!

I get a large refund every year. This year I happen to buy a house. Filed my taxes like always but this year its taking forever. I'm only getting 3 grand back for the house. I'm getting 8k back for everything else. Now this stupid house crap is making me have to wait for MY MONEY! Its really getting under my skin. I have loans I need to pay off with the 7k I'm supposed to have now. I wish I wouldn't have even tried to get the credit for this stupid house, its costing me way more then what I will get. STUPID IRS. Now if I owed them money I doubt they would let me take as long as I want right? What a stupid system this country has!

Exactly...get over it, just

Exactly...get over it, just cuz' you can't afford to purchase a home and are jealous of the ones that can. It's a credit and when they say it takes up to 4 months most people are okay with that but when they keep sending papers back every 2-3 months that you have to sign which could take another 2-3 months to hear back...it gets a little frustrating. Whether you need money or not, it always comes in handy somewhere down the road. I'm still waiting also since December or 2009 and have sent back 3 amendments. Same issues with waiting on the phone for over 30 minutes to finally speak to someone you can't understand and ask questions I have no clue what they're asking.. VERY FRUSTRATING!!

IRS

No, the IRS cannot take as long as they want. I mean, they can, bit at some point, they have to pay interest on refunds.

still waiting in Virginia

You need to get off this blog......these people are only venting and that's ok!!! You "get over it". Don't tell anyone what they need to be thankful for and don't judge why anyone needs this money. Get off this blog and go bother someone else!!!!
You idiots have been told before that we didn't buy these homes to get $8000 we bought them because we could. Stop hating!!!!

Not giving up!

True- "Still waiting in VA". I agree with everyone's concerns. We bought homes because we needed or wanted a home anyway, and for first-time buyers- this was the ideal time!! So all foolery aside... I purchased my home in Sep't 2009, and filed for my credit Feb. 2, 2010. It has been discouraging because IRS says they mailed the refund March 19, but I never got it- could be due to an address error (refund sent to old address). So I updated the address with IRS and now they say it will be mailed again on 4/16. O.k. no problem, but their website has different info. This is where it gets tricky : ( because I called again and they say sometimes the info. they have and the website differ . What???, just doesn't make sense to me. Who's right and what's going on. Please just send my refund. But never-the-less, I will not give up. I wonder if they will spite me for calling them so much, but the way I feel is my hard earned money is included in this refund. So hey, I will continue to call... and by the end of the month I will hire an advocate to assist. Trying to think positive...

I Agree!!!

I agree with you (Still Waiting in Virginia). Get the heck off this blog whoever you are, give me my damn money GOVERNMENT! Do you work for the gov't or something? I am still waiting in Tennessee. I filed my federal return and it was direct deposited a couple of weeks later the end of January. I then amended my return for the $8000 immediately, filled out all the forms, along with my HUD settlement statement. It's been 9 weeks and I called and spoke with someone on April 1st. She said my amendment was "closed" or "approved" or something like that and she said I should receive it in the next 2 weeks. For some reason, I just don't see it happening that easy judging by what I'm reading on here, I hope I'm wrong!! Checking the mailbox with my fingers crossed everyday!!!

date of refund was changed

I checked the IRS refund section and to my surprised the date that I am supposed to get my refund was changed from April 27 to may 4, 2010. There is no reason why, same message was posted only the date changes. Anyone had experience this?

Same here

I just checked "where's my refund" and my date was bumped back from April 20 to May 11. I called the IRS - waited through the prompts and actually spoke to a very polite person who just said to keep checking... everything is being "processed." Today I am two days short of the 8 week mark, so I will keep my fingers crossed.

Date Change

My date seems to change every two weeks when I check the sight. I filed Feb.10th and had an original refund date of April 6th. It has since been pushed back three times and is currently showing May 17th. I finally spoke to someone at the IRS and they said that they have all the documents but I filled out something wrong. They will fix it but when they get to it. So I am pretty much in limbo and cant do anything put wait. I would feel better if I could mail something in with the change instead of wait around for someone to decide they feel like getting to me. But what can you do but grin and bear it. :(

Mine was also just changed

Mine was also just changed from April 20 to May 4...I filed in February and was really hoping not to wait this long!

I just check yesterday and

I just check yesterday and mine changed from April 20 to May 4 with no explanation as well. Did my own return and mailed in mid February. . .

This happened to me too. We

This happened to me too. We sent our 2009 tax return in 2/22. It showed up in "where's my refund" around 3/22 and said our return would be sent out 4/20 as long as there were no errors. I checked it again everyday and on 3/31 our date changed to 5/4. It basically got pushed back two weeks. No reason why or anything.

I did find out that where's our refund updates on Wednesdays so I'll check again next Wednesday and see if it changes again. And I did hear of some people's dates changing back and forth but they all seemed to get it around the 8 week mark. I hope this goes for us too!

I wanted to update my info

I wanted to update my info here. They had changed my refund date from 4/20 to 5/4 and I checked a week later (today) and now it says our refund will be direct deposited on 4/9 this friday!! So it's coming even earlier than the initial date they gave us, which it sounds like is happening to a lot of people. So if your date changes, pray on it, relax, whatever, I think they're just backed up, but about 7 weeks for our return sounds pretty fast to me!!

I purchased my home on

I purchased my home on August 22, 2009, and filed for the homeowner's tax credit on January 23, 2010. On March 20, 2010, I received a letter from the IRS saying that I needed to provide additional information to substantiate my right to the credit. The letter said if the information I submit fully addresses IRS questions about my right to the credit, the IRS will make no changes to my return. However, if the info. doesn't fully address IRS questions, they will send me a letter and examination report explaining changes to my tax. If I agree with the changes, I would sign and return the examination report.

The information they requested to substantiate my right to the credit is on IRS Form 886-H-FTHBC, titled "First-Time Homebuyer Credit Supporting Documents." It asks for a copy of the closing contract and most recent monthly mortgage statement, or if the purchase was financed through a private mortgage and monthly statements are not available, a copy of a cancelled check (or if purchase was a cash sale, proof you paid for the property). It also asks for at least two of the these verifications of residence: (1) driver's license; (2) recent pay stub; (3) recent bank statement; (4) car registration.

Hope this information is helpful. I think filers who submitted additional information along with the closing statement with their initial filing were smart to do that and may see a refund more quickly than those of us who just submitted the closing statement.

6 months and still waiting!

Closed in oct 2009. Send info in a week later. They requested more info in dec. Sent that in now I keep getting letters in the mail saying I need to give them 30 days. This is a bunch of bull. I call every week and it's the same story. They need to hurry!!!

I mailed mine DECEMBER 5th,

I mailed mine DECEMBER 5th, 2009. An AMENDED FORM FOR 2008 taxes. It said delays and wait 14-16 weeks, not 12 weeks like mentioned before.

It's been 16 weeks, so I checked the website today for the FIRST time (the where's my refund thing). I tried EVERY single thing I could think of, it still said NO RECORD OF ANYTHING. I should have checked before.

Fam says to CALL, I think.... ah it will say the same. Now I called the number from the IRS site "where's my refund?" help page (number with extension 263)

I waited 15 minutes on hold (semi-annoying music :) and finally a guy calling himself Mr.Holmes picks up. I take 5 minutes telling info and he instantly tells me THEY MAILED MY CHECK ALREADY WOOOOOHOOOOO!!!@@@@!@!@!@!@!!! Not only that, they gave me $200 INTEREST EXTRA I guess for the delays! (when infact there wasn't in my eyes!)

Awesoooooome.

OHHHH AND THE IRS GUY SAYS IF YOU AMENDED TO GET THE CREDIT THAT IT WILL ****NOT SHOW UP ON THE IRS WEBSITE*****

important info for some people -----------------------------^

thanks, have a good one

Thank you so much for your

Thank you so much for your post!!!!

Where's My Refund

If you filed an Amended 2008, you cannot check the "Where's My Refund" website to check the process of your return. The website only applies to returns filed for 2009 and it does not apply to any amended returns.

How then

I had to file an amended tax claim because I went to HR Block and they weren't going to even have the forms until March. They also said that if I filed both together that they would come back together and that could take a very long time. So my question is how can I find out when they are going to send the house credit back?

Amended 2008

I did the same thing and I guess you cannot check it with WHERES YOUR REFUND, I called and they had not even received it. I had it signed and accepted return receipt and they said it takes 12-16 weeks.. I sent it March 9th. Still nothing...may call tomorrow AGAIN..I just want to know they received it and I could breathe. Otherwise I will resend it I guess.

Florida Friend

Refund

Hi,

Thank you for the info. We mailed our tax credit around the same date as you. Can you please give me the number you called to get the refund information? I couldn't find it on the IRS web page.

Thank you very much for your help.

Debbie Toland

1st Time Home Buyer Tax Credit

My son purchased his condo on 8/30/09. H & R Block filed his Tax Credit Return and I was told it would take from 6 to 8 weeks for him to receive same. Is this factual? He received his IRS' proof of receipt on 3/13/10. When can he expect his money? We are all confused. Please respond. Thank you.

The number I got off the IRS

The number I got off the IRS website is 1-800-829-0582. Hope it helps.

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