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

Calling

I would just like to say maybe if everyone would stop calling they could actually get to our returns to process them....I mean if you are calling every 2 weeks the people that you are talking to are the people that should be working on the files on their desk........so just give them time and don't keep calling them or it will just take longer.

I have given them more

I have given them more than enough time. They are not the same people they just answer the phone. Whoever actually processes these returns are phantom people you are not allowed to talk to them.

The Calling has nothing to

The Calling has nothing to do with your return/tax credit being processed. The calls are handled specifically by call center Reps. I definitely should know since I used to be a Tax Examiner for the IRS.

What number is everyone

What number is everyone calling to get a status? I sent my forms into TX....Thank you!!!

IRS Hotline Number

The IRS Refund Hotline number is 1-800-829-1954; you will need your SSN; your filing status (single, married, etc.); and the exact amount of the refund.

1800-829-0922 option 2.

1800-829-0922 option 2. Enter SSN. Wait for live operator to answer.

number

800 829-0582 ext 462

That is not true. Your file

That is not true. Your file is assigned to a worker, the people you talk to on the phone are not responsible for anything but providing customer service. My husband and I filed through our CPA at the end of June and have yet to get our check.

Not only did my husband and

Not only did my husband and I purchase our home in March 2009, but by June the IRS sent us a letter stating they wanted more information...ok sent in on June 8th...it's now September...6 months after we purchased (we couldn't move in until May as we were going to use this said funds for improvement...but...) we still don't have our $8k and after calling today was told it was to be mailed on the 11th. And if it doesn't come in our mail box in two weeks they suggest to call us back. Oh yeah you know it! I'm glad I wasn't waiting on this to help close on the house! This entire process was not what we were expecting.

CALLING

Calling is not the issue the ones that answer are not the ones that process

Just so you know, the people

Just so you know, the people that are answering the phones work in a call center and that is their only function. They aren't the same people handling our claims. They are simply there to look up the info and handle the calls.

Well then they flat out lied to me

I was told by one of the reps when I called in July that the call volume from people checking on their amended returns was what was keeping them from actually processing the returns, because the same people are doing both.

I wonder how many of them are trying to pass off that lie? I wonder if they're instructed to tell people that to help cut down on the call volume?

I can only assume that it is

I can only assume that it is a lie. I specifically asked that very question (are they the same people that are handling returns) and the reply was no. It's useless! No two people will get the same answer. This is a very frustrating ordeal. What kills me is they say it takes so long for this reason or that but they have the entire USA to deal with during normal tax season. Also, there's a way to check on the status via the Internet with normal returns but with this, it's call, wait, call, wait. Makes no sense to me at all. You would think there would be more efficient means to get the job done. It sucks I know, but hang in there and try to keep a level head. For me, it's nice to have the thought of receiving money and be one of the lucky ones to take advantage of the stimulus but i never have counted on it or put it into my budget because I knew it would be stressful to bank on it.

Finaly received our check

I have ben reading the comments on this site for quite sometime now. My wife and I bought our home the first of may and i filed for the full $8000 that same week. All that we sent sas form 5405 and a 1040x. Read on the IRS website that amended returns take 8-12 weeks so i called them around the first week of July to see how it was going and was told that they did not receive my amended return until 06/05, and that the 8-12 weeks does not start until they have actually put it in there system. So i called back the first of August to see how it was going since then technically it had been 8 weeks and was told that do to so many people filing for the credit that the 8-12 weeks was now 12-16 weeks and to call back later. My wife called on the 21st of August to check again and they finally said that everything had gone through and that it was credited to our account and that they had sent a letter in the mail to tell us (still have not received any letters from the IRS since this whole thing started). She told us that it would be another 3-4 weeks before we received a check. I have heard that they will not direct deposit the refund into your account and that everyone would receive a check. However this morning when i checked our bank account a deposit was made from the treasury for $8,107.00 so they can direct deposit. Total wait time from the first day i sent our paperwork in till today was 18 weeks. Just wanted to let everyone know to hang in there as much as you can because the IRS sucks at there job and are not efficient in anyway whatsoever but eventually you will get what has been promised and what i feel is owed to us the taxpayer.

Did they request any

Did they request any additional info from you? I also closed May 1 and verified they received the request May 12th. I was asked for HUD documents in August sent that in and checked back yesterday (Sept. 11) and was told they are now requesting more information.(utility bill from time of purchase and documents used to verify information on HUD document). Also told case will be assigned to an examiner in 3-4 (more) weeks but he would be needing those documents to make a decision.

We are at 16 weeks as of

We are at 16 weeks as of monday and today a recieved a letter from the IRS saying they recieved the paperwork they requested on aug 7th (I faxed it july 25th) and they will get back to me by oct 21st. this is so ridiculous.

That is messed up totally!

That is messed up totally! The IRS says they received my additional information on August 14, 2009 and they sent me a letter telling me that they would respond by October 20. How is it that they receive your stuff first and tell you that they will get back to you a day later than me? That is one screwed up system!!!!

Direct deposit

We're in the same boat. We bought our home in March, but didn't move in until May; but we filled out and sent in paperwork in March (same day we closed!) and in June they wanted more paperwork sent for proofs...I'd had a house a long time ago so needed proof that the three years was far enough out (it was) so I've been calling and calling...every few weeks...it is now...25 weeks later! Today they tell me the check is to be in the mail on the 11th of Sept and if we don't have in two weeks to call back....but....you're saying you got direct deposit, which I'd rather and they told me they couldn't do.

Oh and how did you get $8107...surely they're not coughing up interest for waiting for them to get motivated!

There is hope

I filed my ammended tax return on August 21st ( please send it certified and next day it was only 22.oo and worth it . After reading that the IRS never received some worried me . I called yesterday and thier first typical response is 12-16 weeks so I played dumb and stated I just wanted to see if you received it ? Sh looked and said it was pending closed which means its being processed and she stated she never seen one that fast . I should expect my check by the end of Sept which puts it at 4 weeks
This went to the Kansas city address
Please take the time to send it certified and next day for the re assurance
I had my tax person file the amended returns and I did send my HUD statement
with it , rather it helps or not I do not know .
If you call and you dont like the answer you get call back as I had a lady that was so very nice while some can be rude .
I did find out one thing that if you call in the week and there is any processing going on thier systems do not update till over the weekend and then call back the next week to see if any information is given .
Just keep checking !! one day its 12-16 weeks the next time its being processed
Though I wont get excited untl I have it in hand at least its movement

good luck to all and thanks for the forum
Kirk

Apartment Number on Condo Set off Red Flag

I bought a condo and closed on 4/30. The IRS received my amended return on 5/15. They said that the fact that my condo has an apartment number caused a red flag and my submission has been sent to "examination" on August 3rd, but they can't do ANYTHING until after the 15th of September because I'm still within the normal processing time. What I want to know is why so many people who sent in their amended returns after me on condos with apartment numbers got their returns already.

The IRS is ridiculous, and they should be able to do amended refunds electronically to cut down on the processing time.

I bought a condo with an

I bought a condo with an apartment number also. Maybe that's what's causing problems with my amendment also. Mine was received by IRS on May 4th and I still haven't received a letter or a check in the mail. My address was updated in the IRS system but as far as anything else, all I get is "still processing". Has anyone with a condo actually received their money from the IRS?? I'm starting to think I may get sent to examination/audit because of my condo having an apartment number. I just wish they would tell me something. If they need me to send in more paperwork I have it ready to send already. I just need to know more than "still processing"!!!!!!

Condo

Well I am on week 19 and I bought a condo. I just think maybe they are taking longer to verify people who have Condos. Has anyone who has bought a condo received their check yet? I have no called back since week 17 because they told me I needed to now wait another 30 days to get either a letter or a check in the mail. I am just gonna wait till my 30 days are up and call and see if anything has changed..... fingers crosssed.

Processing Complete - Tax Credit for Condo Purchase Coming

I called back the day after my processing window ended (9/16), and the agent confirmed that my paperwork had been verified, and my tax credit had been processed. My check will be mailed in the batch going out on 9/25, and according to the rep I spoke with, I should have it either the following Monday or Tuesday. I am also getting $125 in interest.

check mailed 2 weeks ago have not recieved it....

Our check was mailed out on 8/21. We recieved the letter 2 weeks ago and also called yesterday and said it has been mailed with the right address. What mail takes 2 weeks. They told us to wait until the end of the week. Then what start all over again? Has anyone had this problem? I'm worried the mail man has put it in someone else's mail box. We get the wrong mail all the time.

update on 2 week late check

So today is 3 weeks and no check. My husband finally called back and found out they mailed it to our last address. I am so mad. How did we recieve our letter saying it was being mailed at our current address but our check is mailed to our old apartment with an apartment number? Also the last time he called he asked them if they mailed it to the right place!! Well they told us they would mail another one out in 3 to 4 weeeks. We'll see.

I am from up state NY. And I

I am from up state NY. And I too was informed that my check was mailed on 8/21.. I too have not received it. So I too am confused.... Did they even send it? As I have never had a problem receiving mail!!!

I was thinking the same

I was thinking the same thing to i have never had a problem with my mail I spoke with my mail man and he said he would look out for it. i was starting to think maybe my mail man took it. But now after reading different people posts its the irs saying they sent it but really haven't. I got a letter sept 1st saying if i haven't receiveed it already mailed or direct deposit it will be here in aprproximately 2 weeks now how is that and they told me over the phone that it was mailed aug28th. am so confused.

maild but never recieved

We called 2 weeks ago and they told us our check was in the mail. Then the next day we got the paper in the mail saying it was being mailed out that day. Tomorrow will be 2 weeks and still no check. I know they have the right address so has anyone else had this problem?

What state are you from? Am

What state are you from? Am in Detroit,Michigan and today will be a week and i haven't receive nothing yet.

i'm from iowa. our check was

i'm from iowa. our check was mailed 8/21 Today they told us we had to wait 30 days after our check was mailed before they could do anything about it and then it could take 30 to 60 more days before they could mail a 2nd check. And hopefully no one cashed the check because that could take months to prove it wasn't us who cashed it.

yes am having the same

yes am having the same problem they told me it was mailed aug 28th which was last friday and now its thursday. i called and they told me if its not here by the 11th or 14th to call back so they can check into it and mail out another one which would take up to 4wks. everybody else i know and been reading about receive theirs in a couple daysafter the mailing date that was given.

Finally Recevied

I finally got it today I think the irs lied and said theymailed it out Aug 28th. if so it took 2 1/2 weeks to receive it. So please hold on and have plenty patients. It comes in a white envelope.

audit/review

I just like to know if anyone that has been under review/audited has actually received a check?

6 months and still waiting

I sent in my amended return and they received it March 4th. Not until the end of July did they say they needed me to mail in proof of purchase. They received that, and I got a letter saying that I will hear a response from them by Sept 29th. Calling in to me does no good, unless you are wanting to find out if they received something. Of you ask about when you may get the refund, they just give you the whole backed up, its on someone's desk, standard process time jargon. 24 weeks. I never would have guessed it could take this long. It is relief to see that I am not the only one who's waiting though. This is the first time I looked to see what other people are saying.

I sent my ammended return on

I sent my ammended return on 06/01/2009, was told to wait 4-6 weeks, called on the 6th week was told to wait 6-12 weeks, called on the 13th week and was told my return was processed and would be mailed out on 09/04/09. We'll see what happens, my co-worker also applied for the home credit and he is on week 22. Called them today and was assigned a tax advocate, he is looking at around a 30 week wait, it is accruing interest but only at a rate of 4%. The wait time is so random, it seems they have no system in order, just send it in and wait.

re: waiting for first-time home buyers credit

I am also waiting for my $8000 first-time home buyers credit. I filed on May 29th. I have not received anything in the mail. I noticed you mentioned that you called somewhere to find out more about your credit. What number did you call?

VA

This website has become like a support group for me!!

Anyone from VA received their tax credit yet??

fthbc

I am still waiting. I got a letter from the IRS saying it would arrive in about two weeks.

VA?? I assume you are

VA?? I assume you are refering to a VA home loan? The IRS received my ammended tax return on 4/15/09. I utilized the VA for acquiring my home loan. It is approaching 21 weeks and I have not received a letter, call, smoke signal or anything from the IRS regarding the status of my tax return. I started calling around the original time frame of 8-12 weeks. Then it was moved out to 12-16 weeks and still nothing.Now it is almost 21 weeks. I called the IRS at least once a week starting at the 12th week with an average of 30 minutes per phone call. So, roughly 4.5 hours on the phone. I have been told everything from "I have 2 checks waiting to be sent out" to "they don't know where the return is". Most of the people I talked to were ok to deal with, but some are complete idiots and could care less........they don't even pull up my information on their computer. I called a tax payer advocate and got a case number assigned to me. The taxpayer advocate sent me a letter saying that I needed to send her my ammended return and some closing docs etc. Shouldn't they have access to this info?? It's a feakin VA loan!!!!! The federal government has obviously approved everything because they signed off on the loan and I am living in the house as of 3/20/09!! The plot thickens! My wife and I were married before we closed on the house and since we filed our original 08 taxes as single, we filled our ammendment returns as single also (so we both would get $4k). She and I mailed our ammended returns on the same day from the same mail box and, subsequently, the IRS received both returnes on the same day 4/15/09. Not unreasonable to believe. However, my wife received her $4k almost 2 months ago. So, where is my $$$$$????? Anyway, I faxed the info requested by the taxpayer advocate lady and followed up with a call to make sure she received my fax. I left a message for her to call me to confirm that she got it and to see if I needed to provide any more documentation. That was 2 weeks ago. I called her again yesterday and left another message......still no call back. I called her again today......no answer!! I called her boss after that......no answer!!!! I got in touch with a nice lady that just answers the phone and she said that they are not working today, but she asked me to re-fax the docs to her and she would make sure that the taxpayer advocate lady received it and she would call me back in 15 minutes to confirm receipt...........that was 2 hours ago and still no call back. So I just called her again and guess what? Yep, no answer...just an answering machine!! This was spawned by the fact that the lady that answered the phone said that she could not find any record of them getting a fax from me. So, now I guess I just hurry up and wait?? I have a fundamental understanding of what the tax law makers were trying to do with this stimulus related law, but in no way was the IRS capable of handling such a huge undertaking. If the IRS was a business, they would have folded a long time ago. I can't believe how inefficient they are. I read the blogs from other people and they mention receiving interest when they receive their check. That is great for the first time home buyer, but look what they have to go thru to get it. If you dig a little deeper, this interest that they are receiving is being paid by who?? You got!! We are...the tax payers!! I have to ask myself how much is the IRS paying people in interest and what is the average amount of the interest. I can only imagine what these figures look like. Hundreds of thousands??? Tens of millions??? For what??? For being inefficient!!!! So, not only are we the tax payers paying for our first time home buyers credit (thru taxes), we are also paying for having to wait for this promised credit beyound the alloted time that was established by the IRS in the form of dealing with advocates etc which decreases our productivity at work or home. Finally, we the tax payers are paying interest penalties for the IRS being inefficient. So, if I were to summate the total amount of all first time home buyers credits + the decreased productivity (opportunity cost) of the home buyer awaiting for and researching the whereabouts of their credit + the cost of the associated interest that the IRS is paying for operating poorly, then this figure has to be astronomical!!! I don't understand how this system can be so screwed up? I'm not really seeing the benifit of being an honest, hard-working, tax paying veteran?? I apoligize if I sound like I am bitching, but I am! Thanks for listening!!

Called today

My husband and I closed on our house the end of June, sent in the 1040x and the 5405 forms few weeks after and they received them July 27th. My husband called today, spoke to a very nice lady and she told him that our papers were being processed and to give it up to 12-16 weeks before we should expect the check. We are only on week 5 right now, so hopefully we will get it a little bit sooner then waiting the full 16 weeks.

At this point, you should be

At this point, you should be happy if you receive it within the 16 weeks. I have been waiting 20 weeks.

3 year loop hole?

I owned a house while married, until 2007. I divorced and lost my house in the process. Eventually filed bankruptcy and went through foreclosure. I was approved for an FHA loan with extenuating circumstances and purchased a house in my name only in April 2009. Are there any loopholes that you know of that would allow me to claim this credit?

The only way to get around

The only way to get around this is....to answer the question...Was the first home in 2007, your main home...meaning did you live there, sleep there, etc?

I had a house that was for up for sale for two years before it finally sold....I was not living in the home but had moved to CT well before that (4 years) - so yes I had a house but it was not my MAIN home, where you hang your hat at night, I got the loophole and fought it...good luck.

Didn't qualify for buying my home 2 months early

Well I am sad to say that we didn't qualify for the first time home buyer credit. We sold our home in Oregon May 2006 and we bought our home in March 31, 2009. I. R. S. said no because we purchased the house 2 months early and we waited 16 weeks for that answer. I send the paper work since 4/09 and it took them that long to tell me no. I wish my agent would had told us to wait 2 more months. Well just wanted you guys to know that and to make sure to check when you sold your last home so this will not happen to you.

Got a second chance

We have hope again and now we just have to show when we relocated to the state I moved to and show I.R.S., that it has been our main home in the last 3 years. All I know that everything is so confusing. I went by this information that I got from the I.R.S website:

A taxpayer owned her principal residence. Several years ago, she decided to relocate to a rented apartment, but did not sell the former residence. Instead, she rented it out to tenants. Now the taxpayer plans to buy another house and make it her new principal residence. Does she qualify for the first-time homebuyer credit?

A. A taxpayer who owned rental property within the past three years is still eligible for the credit. The taxpayer cannot have owned and used a home as his or her principal residence within the last three years.

I read this and I appeal the disallowance and read this back to the tax agent and he said that I should be able to qualifed since I relocated to another state in 2004.

We are hopefull and praying. We really need to get on our feet.

Closing on a house the 17th.

Closing on a house the 17th. Due to this site I already downloaded the forms
1040x and 5405 from the IRS web site. Called them with questions on filling the
1040x out. And questioned whether or not to send additional paperwork, aka HUD and Closing paperwork. He informed me that they would shred any additional paperwork and it would cause a longer waiting time. If they need the paperwork they will contact you for it. I understand it's a roll of the dice when and if you get audited.
I'm so excited about owning my own home that they can take their time. I understand the economy is in the toilet. The 8k will be a blessing. Feel bad for those who didn't have this kind of kick back offered to them in the past.

interesting that someone at

interesting that someone at the IRS said sending in the hud ppwk would somehow delay the process because some ppl on here said they got theirs back in 4-6 weeks and they think that it's because they sent the ppwk in with the amended return.

so many diff things being said, it's confusing!

First time homebuyer credit

I filed my ammendment exactly 16 weeks ago and haven't heard ANYTHING from anyone, when I called my CPA four weeks ago he said 12-16 weeks and that's fine, I'm just starting to worry that my regular form of luck is playing a role here and I will not recieve it any time soon. Mine was sent to Fresno and it really irritates me to see so many people here who have filed after I did, in some cases by months, and have recieved their refunds already! This is ludicrous! If I would have known it would take twice to three times as long as I was told...I would have just waited until 2009 tax time. I don't like to make jabs at regular government workers; only congress/president...but way to go IRS you manage to take money effectively, but when it comes to giving it out you seem to be clueless!

First time homebuyers tax credit 2009

Because of personal finance issues I will be unable to close on the house I want until after nov 28 2009, which leaves one potential day on which to close and receive the $8000 tax credit. I have been told by my realtor and mortgage advisor that it is possible to meet this closing deadline, but I must also be prepared to move foward with the purchase if we miss the deadline. I realize that we have no way of knowing what the tax incentives may be for next year, but I am worried that if I close between december 1 2009 and Jan 1 2010 I will receive nothing. Is it possible that any incentives for 2010 may also be applied to that 30 day gap from 2009?

So for the past 2 months I

So for the past 2 months I have been reading the post on this site. I decided I'd finally post. Heres my situation... We bought a house in July of 08. Filed our taxes in early February. Got our return in less then 2 weeks. On February 28th 09 we filed an amended return for the credit, also because we did not itemize the first time around. We went to H&R block to do this. When all was said and done and we paid our $200 to the "tax preparer" she sent us home with the paper work to be mailed. Right after leaving we placed all documents in an envelope, stamped it, addressed it and mailed it out. In early April 09 we got a letter from the IRS stating that we had to mail in another form, we contacted H&R block and was told said person was not in the office and would not be back in til the following week. We explained our situation to them and they said they would contact her and get right back to us. They called us back with "yeah, we have the form here in file, she accidently forgot it in the printer the day you filed" WHAT! Anyways, we get the form and mail it to the IRS. We called a couple weeks later and they said they received it on the 10th of April. After about 8 weeks we called check our status...still in processing. 12 weeks...its going to take 16 weeks... 16 weeks, its been assigned to someone... 18 weeks...its still in processing. How can it go from being assigned to someone then back to processing?? So after reading the horror stories of some people having to mail in MORE forms, we decided we would call today Sept.2nd. Surprise....The check is "scheduled" to be mailed next Friday. I'm not going to get my hopes up til that check is in hand. So to the people who have been waiting for 12 weeks, try waiting since February. And to those who say "if you eed the money that badly then you should have never bought a house" Shit happends. We certainly were not expecting for my husband to have lost his job this year. We were not expecting a lot of this. So yes, we are one of the few who dare to admit that yes...we NEED the money.
Signed...One of many struggling families in the US

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