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

Still waiting

I'm about on week 11 now. Mailed my paperwork (1040x, 5405) on July 9 to the Atlanta office. IRS received it on July 13. I have called twice. The first time I was told it would be 12-16 weeks. The last time I called I was told 14-16 weeks. He said I should call back if I didn't receive it by November 2, and someone would help find out what was going on with my return.

I feel bad for everyone who has had to wait so long. Good luck everyone and congrats to the people who have received their check.

pending question

pending means its ready to be mailed and mine has now a mail date of tomorrow so it was pending about two weeks , It needs to work its way through the system

I mailed my return to claim

I mailed my return to claim the $8,000 tax credit two weeks ago. I called to check the status and i was told it was in pending. The IRS agent said she was suprised and i should could back next week and that they may have a mail date for me. I really need the money to repair my house before i move in and after reading all the bad stories on here i will call my self if i get my money soon. I hope it works out for everybody!

What is on the checks envelope?

Does the check say that you cannot forward it? IRS says that it does not say that but I just want to make sure!

WILL THEY FORWARD IRS CHECKS?

Okay I called two days ago to check on my status. My check is being mailed September 25th to my old address, THEY FORGOT TO CHANGE MY ADDRESS!
Does anyone know if they forward the check if you have a change of address with the postal services? One post office says they will the other does not know. Please help!

2-3 weeks? Too good to be true?

My wife and I closed on our house on August 21st. We sent out our 1040x and 5405 along with our HUD statement one week later. I called today and was told the following:

"Your return was received, it is being worked on. Please hold while I check on something."

****on hold 5 minutes*****

"We will be finalizing your adjustment by the begninning of next month, you will receive notification at that time."

I asked, "What does that mean?"

Response: "You should receive your check in 2-3 weeks, max 30 days."

I asked, "You mean 2-3 weeks from TODAY?"

Resonse: "Yes, 2-3 weeks from today."

So, should I believe this? Will I really have my check by the end of October?

UPDATE: We received our

UPDATE: We received our check on 10/19/09, less than 2 months after mailing in the forms. Not exactly sure why some of us have been luckier than others. I really feel bad for those of you who have waited so long.

Hopefully tomorrow

I called the IRS today ( after 9 weeks of waiting) and they told me that it is set up to be sent direct deposit tomorrow, with $109.09 worth of interest. Does anyone know how they add the interest? Is it how many days you have to wait to get your check from the time they receive your paperwork?

Credit

For those of you who filed an amended return before April 15th...you will be waiting the longest. I saw some people file at the beginning of February. Seriously, why not wait untill you bought the house to file the 2008 return so you wouldn't have to do an amended return. Some of this makes no sense.

Case Closed....finally

So, after almost 7 months of waiting, I am finally told that the case has closed. The refund has been approved, in full! BUT, as of yet there is no release date for my check. I am so relieved, and yet not so much. Who knows how long this next step will take. TIck, tock,tick,tock...

Advocate said it's approved...ANYONE know when I will rcv check

My taxpayer advocate told me the reviewer approved my refund today....does anyone know or have experience as to how long it tales after being told by advocate that's it is approved.

Pay Attention!!!

This is your Government at work on these refund issues. A real shining example of government efficiency! And, you think they will do a better job at handling a Health Care System!! Wake up!! I have been waiting since the first week of June for my refund. What if, I were waiting for a medical precedure controlled by the same type of Government system? Scary!! Still waiting on my refund and have absolutely no confidence on when or if I will actually get one. Very sad situation. Hope others fare better than me.

healthcare

When someone has no healthcare at all, a slow one is better than not one at all.
So what you are saying since the system is slow lets just forget it and let the poor
sick people go ahead and die!! And at lease you are geting a $8,000 refund
come on whats a few months, it beats a sharp stick in the eye. Get it now.

My refund story

We were told that our forms were received on June 5. We have been calling about every 1-2 weeks for updates since early August. Finally, today we were told that our adjustment was approved and that our check will be mailed on October 2. We'll be receiving $8141.50. Our forms were originally mailed to the Fresno office and we did not submit any additional paperwork aside from the 1040X and the 5405. Good luck everyone.

Just called IRS using the

Just called IRS using the 1-800-829-0582 ex462 number. I had mailed my amended return July 6. The agent, a very polite lady was able to bring up all my info and told me the check would be going out October 2nd. After reading all the horror stories on this board, I was skeptical, and actually asked her how she knew the check would be going out on that date. She indicated that all approved amended returns and checks are "batched" for payment processing, and that date was shown on her screen. So I guess I gotta wait another couple weeks to see if she was just shining me on. Good Luck everyone.

I AM DISLIKING THE IRS!!!

so i called again today to the number that was posted spoke to a rude person and was told it looks like mine was sent to examination and i should rec something asking for info. my return was rec'd aug 24th. any one who has been placed in exmanation got there checks yet???? please post and let me know.

I sent out my ammended

I sent out my ammended return back in May and called on Aug. 22 and they told me mine was under review and that I would receive something within 30 days, which I did and then I sent off the required documentation they requested two days later (Sept. 15). I just called to check that they received my info and the lady told me that they are reviewing that and it may take another 30 days for them to decide if they need more information or if they will approve the return. 4 months and counting and still no answer here......good luck :)

I am in the same situation.

I am in the same situation. I bought on May 5th 2009 and filed my return on May 15th. It is now Oct 4th and I have not received any money. I have received several letters. One that said to send in my HUD paperwork. I did that that. The last letter I got was dated Aug 31st and IRS said they approved my amended return. It said, "We are pleased to tell you, we did not make any changes to the tax reported on your return. If you are due a refund, we will send it to you within six to eight weeks". The time since I originally filed has been 20 weeks (3 months). The amount of time it takes is ridiculous. Don't count on this money for any serious commitments. When you actually have it in hand, then think about what to use it for.

Mine was in examination from

Mine was in examination from August 28 - Sept 22. One Sept 14th I receive a letter from them telling me they recieved my information and it is in review. I called on the 22nd when I got the final letter telling me they approved my credit. They said to call back in 3 weeks to find out when my check will cut. I closed on my house and filed the paper work on June 22. This is a long process, had I known it was going to be this long I would have waited. I know some people got the approval letters and the checks a few days letter. Who knows how long it really takes. There will be phone numbers on your letter call them for status from now on.

Closed on our home May 1st.

Closed on our home May 1st. Mailed ammendment and forms May 12th. Verified IRS received it May 15th. Went to examinations in June. Still waiting for an examiner to be assigned to my case. (September 28).

About time

Well thank goodness it took me 14 weeks, countless calls to the IRS, 2 emails to my local congressman, and a 45 minute conversation with one of the IRS tax advocates to find out my tax credit of 8,143 including intrest would be mailed out on october 2nd, which just so happends to be the 16 week mark of me waiting for this check. Good luck to all of you who still have not gotten their checks just stay in there and be persistent.

2 different stories

So, I called IRS 10 days ago (sent our ammended return on Aug 19), spoke with a very nice woman that said our return had been processed and a check would go out in about 3 weeks. So, I call last night,(to seeif they would give me an exact date of when the check may get mailed out) and spoke to a not so nice man and he said, that I am calling too early, that our return is "in processing", and call back in 3 weeks. How do I get two different stories???

review process

If your file is sent to the examination unit does that automatically mean that they are going to ask for more info later or is it possible that they will made a decision without requesting more ppwk? I received a letter telling me my file was in review but they didn't ask for any additional info. The letter said if they needed it they would contact me.

I can't understand the logic in sending the letter just to tell me my file is in examination, but not proactively ask for the info then?

Has any one on here been notified that their file was sent to the examination unit but never got a request for more info before they got their check?

Kind of unfair...

So, we mailed our return on May 4th. They said that they did not receive it until June 15th. They said it would be 8-12 weeks before we received our refund... we are still waiting. I have called several times and get the same story every time. I called today and they said that are sending out a request to the Kansas City office b/c it has been more than 45 days since they received it and I have not been contacted.
How much longer is it going to take?!
We desperately need that money to do some home repairs and pay off some student loans. Why do some people get it a few weeks later when they filed way after me? I read that someone filed in August and already got there refund... wtf??

Listen to this Bullxxxx

My husband and I filed our amendment in the end of April 2009, and they didn't receive it until June 4, 2009, they claim. My husband had been checking up with the credit return ever since August. My husband called last week and they told them that is was still pending. I called this week, and the woman told me that they sent a letter on August 17 stating that it was decline. I told her that I didn't receive the letter. She told me that it might of went to the previous house I was living at. I told her that it was my parents house and I always get my mail there because I didn't change my address. She put me on hold for the second time. She came back and told me that they just closed the account last week. So I said, " they sent me a letter back in August stating that it was decline and they just closed the account last week!!!!" She put me on hold a third time. She came back sounding confused and said that she has no other information. She also told me that I should file again. THAT'S BULL SHEET!!!!!!!!!!
So my husband called two days later and they told him that it was pending. There were no notes or anything saying that it was declined and closed. Can you believe that.

First Time home Buyers mistakes

I am a tax attorney in MI. After reading several peoples emails and complaints including my clients I can make an educated guess why people are not getting their returns or they are late. Here are the most common mistakes people make.

1. It is a "{FIRST TIME}" home buyers tax credit. It seems people have not grasped that part and only hear $8000.

2. They buy a home that needs major repairs and is on the market for under $50,000 and they do not get the desired amount from the IRS if any. Once again people not reading the law and only hearing $8000.

3. Not signing the signature box. Yes it is simple but a good portion of the turbo tax and self preparers miss this part.

4. Refilling. Nothing sends red flags up at the IRS faster and they will make it go slow as molasses.

5. Another common problem is that people will go out and buy a home on the ramblings or ignorance of relatives and friends on how the First time home buyers tax credit works and then wonder why they were denied or did not receive the desired amount. I can not count the number of times I have hear "but, but, my friend Jane doe said if i do this i can get this. Research things before you jump into the fire.

The process will be slow or fast depending on any combination of things. The IRS may want your HUD-1 closing statement but their own computers in most cases can bring up a closing. The other part of it is whether or not the closing company and the Realtor has filed all of the necessary paperwork.

Still Waiting....but, maybe a glimmer of hope

I have been waiting 22 weeks.

I sent my ammended return 5/1.

Irs received it 5/7

After 16+ weeks and the irs saying "i dunno" and I finally throw a fit they notified me of the fact that I could get an advocate to work on my side to get the money. BUT, only if I was experiencing financial hardship.

My overdue dr's bills, past due utility bills and credit card balances I was racking up was "probably not enough to get approved for the processing of your return" I was told by my advocate. I thought this was crazy, since I should ahve already had the money at that point without having to go through the advocate.

But, after another 6 weeks I received a call today.

I was told I was approved for the hardship and should possibly be getting my refund on October 9th. I don't know if that's the day it was mailed or not. She said she is unaware if I am eligible for interest or anything like that, but should be able to see it in the system next week and will be able to let me know then.

I am trying not to get too overly excited, as I don't have the money in my hand yet, but hopefully I am on the right path to getting it. I will repost when I have the final count of weeks and dollar amount.

Good luck to everyone still waiting!

called 2 day

Called 2day and was told that our paperwork was through processing and was pending, which I guess means waiting to be mailed. Does anyone know how long it takes after you are through the processing stage?

F.Y.I. We closed on our house on Aug 26. I put the paperwork in the mailbox on Aug 29. was sent to Austin.

Good luck to those still waiting.

Ours was sent to austin also

Ours was sent to austin also and the rep said 3-4 weeks after it was entered in the computer.

My husband and I closed our

My husband and I closed our home in January the new law didn't pass until February three days after we did our taxes (H&R Block) so we went to H&R Block to have them amended so we wouldn't mess them up and they took another 4 weeks to do this. When we picked up the papers we asked if we needed to mail everything with it and they said no. We mailed it to somewhere east (we live in upstate NY) and waited at the time 4-8 weeks. We waited six to be fair. They told us that it could take up to 12 weeks and that it is not being processed at the time. So we wait and call back again once again they tell us that it can take 16 weeks by this time we are going into may (they recieved the ammendment in March). So we wait the 16 weeks and they tell us now that it is being sent for review and that they can take up to 30 days to review the papers and will send us a notice if we need to send in more papers. 30 days hits and then 40 and still no notice so back to the phones and they now tell us we can have and advocate and that someone will contact us with 24 hrs. well, two weeks pass and nothing so back to the phones and am told that an advocate was assigned and given her number ( to someone in texas and I live in NY) and the same day recieve a letter telling me that it is in review and they have another 30 days to give me an ansewer this was on july 7th. So we contact the advocate and she said that we will hear from her in a few days wrong we called her and she said that we need to fax some papers so we fax those. then two weeks later still nothing and we contact her again and she says we needed something else so we fax that and I called her right away and she said that she was sending it right out and that we would know in 30 days (I'm beginning to think this is the only number they know) this was on 8/28/09. So my husband gives her a call today 9/22/09 to see what is going on and she informs him that she just sent it out last week because she decided to take the beginning of the first month off. Now we live in upstate NY where in the winter the nicest day is 30 below with no wind. we bought a trailer that is old have five children and need to fix many things we qualify for 7,500 hundred dollars and neither of us have we ever owned our own home. So at the end of the conversation to my husband she said that it is going to take another 30 days so I guess we'll see. Why is it when the IRS owes people money they take forever but when a person owes the IRS do they get to file charges against the person?

IRS can kiss my

I just waited on the phone for my entire lunch break of 45min and finally got to talk to a less than helpful and not so nice woman, and I informed her that I am now in my 18th week! I have always talked very helpful people the last 4 times i have called too! And she informed me that I was put into audit for investigation but couldn't disclose any of the information on what is being investigated. She also very snottily told me I'm not the only one waiting and I shouldn't let it ruin my day. She told me it will take up to 30 days to receive a letter informing me if I need to send anything in for proof, AND then an additional 12 weeks from there to actually get my money! I can guarantee the only reason for being put into audit is because we are a lower income family. I have been very understanding this entire time and maybe it was just how she addressed me that rubbed me the wrong way, but I am very VERY unhappy with the IRS

We too have been waiting far

We too have been waiting far too long! We also are a lower income family and once we spooke to an irs agent and he told my wife that he doesnt see how we could afford to buy a house and that we might not be able to get our tax credit because we had a low income! They received our addendum on may 20th 2009 and told us if we didnt get it by the 20th of september too call them and they might be able to send the audit department something to speed up the process,so we called on the 22nd of september and they said that they are going to send us a letter they couldnt tell us what was on the letter but they have another 30 days to send us the letter! i told them i have never heard of anyone in the states taking 30 days to get a letter anywhere and he said they have 30 days to send it,so they will probally wait till the 30th day then send us the letter which who knows what it will say.I am so frusterated and the worst thing about it is they dont give a @34# and i feel there is nonthing i can do about it.I wish someone in the goverment would get on the people in the irs and penalize them we would get charged out the @## if we messed with the irs for this long its not fair!

Really?!

My Tax accountant for my home business informed me today that this is all happening because they are running out of money, so they are trying to catch people in screw ups. Typical.

4k or 8k ?

We (married) will by our first house within the next weeks but I will not hold the title - just her. Can we still file for 8k or just her because of the title?
Thanks!

Yes, just her and for 10% of

Yes, just her and for 10% of what she bought the house for OR $8,000, which ever one is LESS.

Example 1:
I purchased my home for $100K. 10% of that is $10K. I can only get the max of the $8K back.

Example 2:
I purchased my home for 70K. 10% of that is $7K. It is the cheaper of the two and all I will get back.

Go to www.irs.gov and search for the credit. They have ALL the information you will ever need to know on if you qualify and how much you would qualify for! ;)

Good luck

Just her and 8K

Just her and 8K

I just spoke to the IRS and

I just spoke to the IRS and they told me that "it should refund on the 10th of October." Does anyone know what that means? Does that mean that I should receive my refund on the 10th or does that mean that they're going to finish processing the check on the 10th?

I just spoke to the IRS

I just spoke to the IRS people today and they said that "it should refund around the 10th of October." Does anyone know what that means? Does that mean I'll be receiving the refund around the 10th or does it mean that their going to cut the check around the 10th?

credit

ok just to share my info- sent amended return on 6/26- they recieved 6/30. started reviewing it on aug 28th- called today and said it was finalized and a check will go out oct 9th. 14 weeks. Wisconsin. keep the faith it aapears 12-16 weeks is the norm.

16 weeks is NOT the norm

We filed an amended return for the first-time homebuyers credit on April 17th, 2009. We are going into 23 weeks and still waiting for ours. IRS complains they are over whelmed and due to fraudulence this is the hold up. We have been getting a different excuse every month since we did this.

JUST RECEIVED CALL FROM IRS

I have already posted on here that I had filed my amended return on 04-10-09 and it was received on 04-14-09. After a couple of months I began calling to find out what was going on and was told that it would take 6 to 12 more weeks and that my return had been chosen for review. I finally received a letter on 09-08-09 asking that I send the HUD form, deed, and sales contract. I called the number listed to see if it would be better to fax it and was told that it probably would be. I tried to fax it but it didn't all go through, so I decided to mail it certified, return receipt on 09-10-09, just to make sure it was received. I called a week later and was told that it had been received but not to call back for another week, as they had not yet had enough time to process the info I sent. Today, 09-22-09, I received a call from an unknown caller stating that she was from the IRS. She verified my info and told me that she had received all of my info via fax except for the HUD form. I advised her that I didn't think it had all gone through so I also mailed it certified. She said to just go ahead and fax it to her now, so I did. She called me back in less than a minute and said that it was received. She told me that she released my refund today but that it might take 3 to 6 weeks to get it. I asked her if it would come by mail or direct deposit, as the latter is how my original refund was set up and she said that she didn't have that info at present, but I can call back in about 2 weeks if I haven't received it. This agent was very kind and courteous and her number is 0199648, A. Casper. Just thought I'd give credit where it's due!

It's a bummer that she said it could take 3 to 6 weeks, but at this point, I was just glad to actually communicate with someone there that said the funds were released!!!

The IRS CALLED YOU??!! The

The IRS CALLED YOU??!! The IRS doesn't call you, but sends coorespondance to contact tax payers!! I hope you didn't give this person any information, because this is a SCAM!!

IRS

The IRS has called me a couple of times when I was having problems with my tax return. It was the same person though. She helped me out and within a couple of hours, I had my return, direct deposit.

CALL FROM IRS

No, I don't think it was a scam. The name and ID number that the lady gave me (A Casper - ID 0199648) when she called is the same as what was listed on the letter I received requesting the additional information. I think the only reason I received a call is because the HUD form did not go through when I tried to fax it and she was asking that I fax that form again. I did think it was unusual, but it's also unusual that it is taking this long to receive the refund. I'm going on the 23rd week since they received my amended return.

re call from irs

what office did u mail ur return to?

Not necessarily a scam!

Just wanted to comment about the post where the IRS called the taxpayer. This is legitimate because when I received my notice about them needing additional information for my examination there was a line saying that if I wanted them to call me in person to add my phone number. So it is possible for them to have called this taxpayer in regards to their examination.

I've had the IRS call me in

I've had the IRS call me in regards to our normal tax return... It's not THAT abnormal!

It's in Exams!!!

I think I have you all beat! I bought my house the end of Feb. 09 Filed my amended return March 09. It is now Sept. 09, and I have not seen a check.
I waited the original 8 weeks before I called. They said they had not recieved my return. They said wait 2 more weeks, and call us. I did. No return recieved. So, they told me to resend it. I did. I called 2 weeks later, they recieved both returns. That causes more of a delay. Now they have to process both returns. From that point on I called every week. Sometimes the reps were nice, some were nasty. One week they said my amendment was in the exams dept. The next week they said I should receive a check soon. The following week my amendment was in exams!!! These people are ridiculous. Finally, after 5 months of waiting a receive a letter saying that they need my HUD papers. Why dont they ask for this right away? I sent it out the next day. Called the following week, nothing new. I get so damn mad talking to these people. No one kinows whats really going on. Last time I called I asked to speak with someone who did. They gave me the number to the exams dept. The woman there was very kind, but still offered no hope. Just wait, basically. This was the beginning of Sept. She said they were just processing exams from the end of July, so it would be several weeks before they got to mine which was recieved back in Aug. Then, (this is the best part) it could take 6 to 8 weeks to issue my check!!!!!!!!!!! Give me a break! I told the woman, I'll probably l lose the house before the check ever comes. She said that the examiner would call me when she got to my case...no call so far.
What's this about interest? Are they paying interest to those who have had to wait? Cause I've been waiting over 6 months!!!

Interest

Yes- they will issue your check with interest :) My apologies to those in waiting (my significant other and i split ownership of the house- I got my check right away (within 3 weeks of filing) and he is still waiting...

I filed my credit through turbo tax- like i do my normal returns--- no problems! My check did have a little interest- but I imagine all you will have more :)

Having the same problem

Getting the run around as well! Mailed my ammended return July 3rd! Have been told all the same things! First have to wait 16 wks, then oh you'll see a refund in 2 to 3 weeks! Then I called yesterday and they start with the whole "oh its in the evidence dept" you'll see a letter within 30 days requesting more info! Then they have 30 days to process my info and another 70 days to pay me! That would be 6 months not 16 wks! So I emailed my state congressman for my area about all of this yesterday! His office emailed me today to have me sign a consent form so they can call the irs on my behalf! Call your reps for help! That is what they are there for!!!! Especially with elections coming up! I have a good congressman! Good luck!

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