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 called...

I called the 800 829-0582 ext 462 number and talked to a very nice lady who informed me that my info was received 08-20-09 and that its still pending but it looks like mine is moving much quicker than most (I sent in my settlement statement and HUD statement). She told me to call back on September 21st to find out what day my check will be mailed out. I am in Louisville, KY and I closed on my home July 31st so if I could get my check within 6-8 weeks total that would be wonderful! Thanks to whomever posted the number! I appreciate it :o)

Delays

I bought my house on July 16th, and mailed in my paperwork the next day. 4 weeks to the day later I received a letter from the IRS with my amended return stating that I had not signed it. Boy, did I feel like an idiot! I am keeping my faith, though, since they got back to me that quickly. I immediately signed my amended return and sent it back. (I'm in Idaho...our IRS office is in California) Tomorrow will be 4 weeks since I returned my SIGNED amended return, so we shall see if things move as quickly as they did the first time I sent it in. I know its frustrating to wait folks...but try not to get too angry. Remember, they are people, too...its got to be pretty crappy going to work every day knowing half the country is blaming you personally for the fact they haven't received a check yet.

It is beyond

It is beyond frustrating!!!!! Please don't tell me to not get angry and get back to us when you have been waiting 16 weeks and have not heard a thing from anybody. I am not worried about them feeling crappy when they go to work. At least they have a job. If I did my job like they did theirs I would not have a job. I understand that they are not processing the returns but they are evasive and clueless.I feel crappy when I go to my mail box everyday and still not one thing from the irs. I feel crappy when I call them and wait on the line for 35 min. and still not learn anything. Give me a break.

Next Wed it will be 16

Next Wed it will be 16 weeks. I am so frustrated!!!!!! Now I have to wait till then and then call and they will write a referral and send it to whoever is over my file. But then they have 30-45 days to respond. I think I understood that right. It is hard to make any sense when you are being told something different everytime. I have contacted my congressman and he seems to at least care. We shall see what happens. I am out of patience and when I read on here that there are people way past 20 weeks and still waiting my heart goes out to them. And then there are some that get theirs back in 4 weeks none of it makes any sense.

Waiting, Waiting, Waiting

My husband sent out our amended tax return at the end of July, It is now September 10th. I am wondering when the money comes through since our CPA told us 6-8 weeks but after reading all of this I am really wondering! We are depending on this credit for so much needed remodeling on our new home. We waited so long with problems with the bank to get the house and now I just want to make it a home. I live in Michigan and winter is around the corner and I really don't want to be working on the house in the dead of a Michigan winter! If anyone else from Michigan has any input on how long to expect to wait that would be great! I am planning on calling today to find out anything.....WISH ME LUCK!!!!

Waiting in Central Michigan

Well, I certainly hope that

Well, I certainly hope that your luck is not as bad as ours has been with getting this check but just in case, I would prepare to wait for a lonnnnggggg time if I were you. My husband and I sent ours in March and we are still waiting. September 14 will begin 7 months for us with no end in sight. We have been in examination since July and I am getting way beyond the point of frustration. They have told us to wait until October 20 and we should hear something from them. By October 20 it will be 8 months!!! I can't even imagine why it should take that long when there are many many people getting checks in less than 12 weeks.

16 weeks and counting

11 September was 16 weeks for me.

talk about waiting

we sent our ammended tax form may 4th 2009 we recieved a letter 14 weeks later saying they need more information and we mailed and faxed it back the same day we received the letter now almost a month later we get a letter saying they had just recieved that letter, i called and they said it will be 90 days before it reevaluated ,, my best friend had sent his ammended tax return in july and has already recieved his check<<<<<<<<<<<<<<< WHY?

GOOD LUCK!!!!!!

GOOD LUCK!!!!!!

We are in the same boat. We

We are in the same boat. We closed on June 6, 2009, and filed for the credit a week later. I was told that it would take 6-8 weeks by H&R block, but after not receiving it by mid-August, I contacted the IRS. I was told by the IRS that it actually takes 12-16 weeks...so I really don't know!! Guess we'll continue to wait!

Waiting in Michigan

We bought our house on April 22. I was having trouble with our turbotax program before I filled our taxes in the begining of April. Long story short, I was having a problem with a vehicle that was totaled (business related) and it was treating it like a capital gain. We wanted the money from our tax return to put down on the house, so I filed knowing that there was an error. Got Refund. Bought House. By the time I had a chance to call turbotax and have them help me fix things and amend my return, It was the 1st of June. IRS says received on June 5. Called a couple of times and always got told a longer processing time. Last time I called was last week. Said that it had been reviewed and assigned the First time home buyer status on August 19, but didn't have a disbursement date yet. He told me the 16 week period would end October 3. Like everyone else. we need the money. For those of you who say if you need it that bad, then why did you buy a house? I say I wouldn't have put 10% down instead of the required 3%. And I wouldn't have spent $2,000 in the begining of this making cosmetic repairs to the house. We would have saved some out for things that come up like the plumbing getting clogged, or the toilet leaking.

Because of the massive

Because of the massive requests for the tax credit, the IRS has increased the processing time from 8 to 12 weeks to 12 to 16 weeks. I sent my return to the Fresno office on Jun 2. The received it on Jun 8. It was completed on Aug 28. The last I heard is that it is due to be mailed on Sep 18. We shall see.... As far as calling to see where yours is, a good number is 1-800-829-0922; option 2; enter SSN; wait for operator. With that number, I have never been on hold for more than 15 mins. Good Luck!

WAITING, WAITING, & MORE WAITING

Tomorrow will be 21 weeks since the day the IRS received my amended return.

Monday the 14th made 26

Monday the 14th made 26 weeks for me! I am still waiting and I am still sick of waiting. I have been told that I should have a response no later than Sept 28 and if I don't then they can file an inquiry. But, I am not stupid I already did that once when they exceeded the first 16 weeks and all they say is you have to give them 30 to 45 days to respond so I won't be going there again! By the way, to all of you who have contacted State Reps and Congressmen or women and have received a response from them you are lucky! I emailed them all about 2 or 3 weeks ago and have not heard anything from any of them. Good to know they got my back!!!

TAX ADVOCATE

Any updates from anyone who has a tax advocate? I called for a status today and was told by the IRS rep that they can no longer provide a status because I have a tax advocate. Anyone else experience the same?

ADVOCATE ...HA! WHAT A JOKE!

AFTER 17 WEEKS AND THREE CALLS TO THE IRS, I WAS TOLD THAT MY CASE WOULD BE ASSIGNED TO AN ADVOCATE AND THAT I WOULD HEAR BACK WITHIN 30 DAYS. WELL, I DECIDED NOT TO WAIT ANOTHER 30 DAYS AND CALLED A NUMBER I FOUND FOR THE TAX ADVOCATES.

MS COOK, MY ADVOCATE, INFORMED ME THAT EVERY TIME I CALL, MY FILE IS PULLED AND THAT DELAYS THE PROCESSING EVEN FURTHER. (IN OTHER WORDS...STOP CALLING!) SHE ASKED IF IT WAS A HARDSHIP CASE AND WHEN I TOLD HER I NEEDED THAT MONEY TO PURCHASE FURNITURE SHE TOLD ME THAT WAS NOT CONSIDERED A HARDSHIP.

AS LONG AS I AM STILL ABLE TO PAY MY BILLS, THERE IS NO WAY THEY CAN EXPEDITE THIS PROCESS FOR ME!

STILL WAITING.....GOOD LUCK TO THE REST OF YOU!!!

yes the same reply.

yes the same reply.

TAX ADVOCATE UPDATE

Just heard from my Congressman's office and was told that due to the many fraudulent amended returns sent to the IRS most of the forms submitted are being audited. My advocate hopes it can be fixed in 2 weeks...I still wish I had waited to file next year.

I am not against the

I am not against the auditing I want them to make sure people are being honest. I just don't understand why when you are turned over to audit it is not handled in a timely manner. I am at 16 weeks now and I have not received anything from them asking for any verification. I believe that if they can get checks out in 4 weeks to people not being audited then I should have at least received something from them in 16 weeks.

First time buyers in San Gabriel

I'm curious to see if they extend this credit for next year. I specialize in condos, townhouses and other real estate in Azusa, Glendora, San Dimas and the San Gabriel Valley and the majority of my clients are first time home buyers. I think the credit helped move a lot of buyers off of the fence to purchase. Since the economy and the real estate market is still very shaky, I don't see how they can not extend or give a credit similar to this one next year. Hopefully they'll have worked out the kinks on getting people their refunds in a timely manner by then.

On its way...

We closed on our home 7/14/09
We submitted our Amended return 8/05/09
contacted IRS 2 weeks ago stated procesing, called back on 9/08/09 and stated it will be in the mail on 9/11/09 - 5 weeks and to days. Will update once I r eceive it.
Live in houston mailed to Austin.

houston tax

where did you mail to in Austin and who did you address it too?

Hi, sorry it took so long to

Hi, sorry it took so long to respond. I dont know the address, since our accountant addressed it. However, I am sure if you look at the Austin IRS thats probably where we submitted it to . Good luck

just spoke to Ms Martin

I closed on July 10th, sent in amended return along with HUD AND deed copy. IRS in Austin received it the next day. Ms. Martin just informed me that my return was now in the "Examination Unit" to make sure no fraud was involved because there are so many instances of fraud going on and everything is being picked over with a fine tooth comb. She made it seem like everyone's return goes to The "Examination Unit". Wish I had gotten clarification. She said they may contact me and ask me to send in my HUD 1 statement again.

She said it takes 12-16 weeks for the entire process. Was very polite. I just sent it in a month ago, so I'm not expecting anything soon, but I def do NOT want to be a 16-20+ weeker, lol. Before Thanksgiving would be GREAT, but before Christmas will work.

Just spoke to ms. martin UPDATE orig post 9/9/09

adding an update .
9/19/09, got the letter from the IRS in Austin letting me know that my file is in examination. Same thing Ms. Martin told me 10 days ago. Wow, 10 days to get a letter telling me the same thing I was already told via phone .They didn't explain why nor did they ask for anything. The letter said IF they need some more info, they will contact me.

What is HUD Paper?

Can you please tell me what the HUD paper is? I do not know!! I have everything ready to go 1040X,5405, 8822 and deed but I do know what is HUD paper?
Can you please tell me.
Thanks
Diana

the hud statement is the

the hud statement is the settlement form. when you closed on your property they gave you a hud form, which broke down your closing costs and any other misc. fees that you had to bring to the table in order to actually close on the home. You have the form!

I closed on my home 3/3/09

I closed on my home 3/3/09 and I mailed my amended return on 3/26/09. After 14 weeks I called the IRS and they told me my file was in examinations/review. They said they would send me a letter requesting additonal documentation proving I was eligible for the credit. I got the letter 2 weeks later and I sent my HUD settlement statement and the deed for my house. They had 60 days to review my documents and tell me if it was acceptable. Last week I got a letter stating my documents were acceptable and they would mail my refund within 6-8 weeks. So that's sometime in October. I closed in March and won't get the check to October. 7 months after I closed. So sorry but don't expect to receive the refund anytime soon. I'm in the Atlanta area and obviously my IRS office is slow. Don't make any plans or depend on the money to pay something off. They are taking their sweet time.

Why does it take 6-8 weeks

Why does it take 6-8 weeks to mail out a check!!!!!!

CHECK MAILED WITH INTREST

I CALLED AND B/C IT HAD BEEN PAST THE 12 WEEKS MY CPA ADVISED ME IT WOULD BE AND THEY SAID IT WILL BE MAILED SEPT 18 WITH INTREST TOTALING $7,712.89. SHOULD HAVE ONLY BEEN $7,600.00 BUT I WILL TAKE WHAT I CAN GET!! JUST WONDER HOW FILING MY TAXES NEXT YEAR WILL BE!! THIS IS AFTER ALL ADD'L INCOME!! WILL REPOST WHEN IT ACTUALLY DOES COME IN!! WISH ME LUCK!!

this is a tax credit. it is

this is a tax credit. it is not considered additional income.

A nightmare tax credit maybe

I understand somewhat when people ask why you would buy a house if you are "counting on this credit". The answer for me is...I wasn't counting on the credit to purchase a home. However, I would not have bought a home at this time with the economy the way it is if it weren't for the government pushing this wonderful tax credit and now is the best time to buy!! Please! They are trying to boost the economy with home sales which is going to blow up in their face because many people are buying homes expecting this money to assist them through this rough time. I'm a nurse, when I graduated hospitals were calling me...since being laid off in July, (one month after buying) all I can find somewhat close to home is a job at a nursing home which doesn't pay NEAR what I was making before. Should have went with my gut and not bought the house, this "credit" should have never been something to rely on. Lesson learned!!!! The hard way!!! By the way, I didn't rely on the credit when buying the house, I was "relying" on the credit when I no longer had my job, so stupid.

Mailed amendment on July 7th, was told today, Sept 14 that it is just "sitting there" and if by next Monday they haven't done anything with it, I can ask for a referral. I pray my referral comes from God!

Quick amended return!

I know a lot of people are having problems with their amended returns, but I did not. I mailed my amended return out on July 25, 2009 and received a check in the mail on September 8, 2009. I guess the Lord knew I really needed the money and made the process go smooth for me.

"Quick Amended Return"

Does anyone that has gotten their return ever come back to this site? lol. Did the ones who got theirs in 8 weeks or less send in HUD ppwk WITH their amended return?

Dear "Quick amended

Dear "Quick amended Return"
Our return is scheduled to be mailed on 9/11/09. It was a total of 5 weeks.
We did not submit any paperwork with our return.
Hope this helps.! Good Luck.

I recommend you send your

I recommend you send your HUD statement with your amended return. They may still take a very long time to send you the return but it won't hurt to send it.

Anyone else?

Have the people who have been waiting 20+ weeks received their checks yet?

No! I haven't received

No! I haven't received anything. I've given up on the IRS because they aren't showing much organization in regards to this program...I'm wish those that process and oversee the refunds would place themselves in the shoes of those that applied for a tax credit. Maybe, they would work a little more diligently at processing these returns and there might possibly be less poeple frustrated for the long delay. The most frustrating thing is not being able to communicate with them. Its been over 20+ weeks and I'm beyond disappointed in the IRS process regarding this matter. We can only hang in there, it'll come...Michigan

20 weeks and still waiting

I noticed some people are wondering about us 20 weekers...I posted a comment on this page about a month ago.....and I still have not received my check. I closed on my house April 27 and over nighted my ammended return on April 30. The IRS (Austin office) received my ammendment on May 2. Last week I received a letter stating that my return was being "further reviewed", so I called and was told I'm being audited, and they told me that I would have to send in a copy of my settlement papers, but that I had to wait to get the letter asking me for the settlement papers before I could send it in....So basically, they sent me a letter telling me that they were going to send me a letter (what a waste of time), so yesterday I got the letter telling me where to fax my info. We faxed our settlement papers in this morning and I was told that I have to wait 5-10 business days before calling to confirm that my fax was received! So we are still getting the run around....I'll post again when I get my check, and good luck to everybody else!

austin fax number

does anyone have that austin fax number handy? I have also been told that i will receive a letter explaining what i need to send but i can see from the responses that the letter will probably take forever to arrive. I feel so stupid for checking the mailbox everyday. foolish of me to think that it would arrive so soon.

The 20+ week wait

Well, I can tell you that I am still waiting. I closed March 30th, Mailed in the Amended Tax return the very next day. I have been told I am up to the "Advocates" level now, and should see a result by November 20th.

NOV 29TH. 2 more months.

NOV 29TH. 2 more months. You have got to be kidding. I am about to give up hope.

I am at 24 weeks and I am

I am at 24 weeks and I am still waiting! It is getting very frustrating to be told the same thing I call every time. They are still looking at it and they will get back to you. Aggravating to say the least!

Tks to Finally received our check

Thanks for sharing your story and giving some of us out here some hope!
I'm on week 15 now and just called today to be told for the second time (first being 2 weeks ago) that my amended return was in review and they do not have a release date for my funds at this time. So my return has been sitting in review for at least 2 weeks. Very frustrating at this point. I'm a single female that just bought my first home on my own and the $8,000 would be most helpful. I feel that initially the irs mislead us first-time home buyers to believe that we would receive our money much quicker, so although I'm thankful for the tax credit I wish the irs would have informed us truthfully about the process and how long it takes. Nothing we can really do except WAIT. :(

Same Boat...

Just Waiting,
I am in the same boat! I too am a single female who feels mislead. My amended return has been in review since the IRS received it on 5/29. Sept. 18 will mark 16 weeks and the IRS confirmed yesterday that I WILL NOT be receiving a check by then! Apparently, it takes a minimum of 2 weeks for the check to be cut, once it comes out of review. So, my patience are challenged but what else can I do but wait...& wait...& wait...

Have they asked you to

Have they asked you to send any more documents?

Waiting in Ohio

Mailed amended return and FTHBC form May 1, 2009
Received by IRS May 7, 2009
Received letter requesting HUD Statement on August 1, 2009
FAXED to IRS on August 3, 2009
Verified it was received on August 6, 2009
Emailed my Ohio Congressman, Senator and local State Rep. on September 1, 2009
Received call and email from local State reps office on September 2, 2009
Called IRS today (September 8, 2009) and was told my additional doc (HUD statement) was received AUGUST 28 and they have 30-45 days from THAT date to respond. I informed the not-so-nice rep that I had already been told the additional document was received on AUGUST 6. He stated that the "system" says August 28th.
Emailed my state reps office about my inquiry and have yet to hear back.

I am beyond frustrated and wish I had waited to file next year.

What are the HUD papers that I need to send?

What are the HUD papers that I need to send? I am just starting this process! I have the deed, 1040X, 5405 and 8822 change of address form also.
Can anyone help?
Thks
diana

Reply: What are HUD papers...

The HUD-1 Settlement Statement would have been given to you at closing (if you had an FHA loan). Providing the deed should probably be sufficient enough proof that you bought a home. Good luck...I'm still waiting;-(

What HUD papers do I need to send

Diana - The HUD papers are called the HUD-1 Statement. It gives all the information on the purchase of the home; whom it was bought from, when the home was purchased, who purchased the home and a bunch of other information. Not really sure if this speeds things up or not. I've been waiting since March 18th 2009 and still no joy. I was asked to mail my HUD1 statement back in June and they misplaced it until the end of July

Paul

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