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

Innocent homeowner

Hello all....

My wife and I are young newlyweds and back in May, we signed for our first home (a new construction). Back in the Spring, things were very confusing concerning the tax refund. We were both very ignorant of the process, so we sought realtor advice. We had two realtors and other a CPA tell us that it was definitely OK to file a refund after signing for the house, yet before we closed on it (since we were waiting for it to finish being built). We have never done things illegally, and would never desire to do so, but when I called the IRS, they informed me that many realtors and CPA had been approving this, but it was NOT the way to do things. He said we may have "slipped" through the cracks and may receive our check anyway. I told him that we had NO CLUE and that if we received it early, I would hold the check until after we closed just to make it honest on our end. Long story short, it was filed in mid May and we close on Sept 8. They can't seem to find it in their system, and we are worried they will flag us as fraud. What should we do? The IRS guy said to keep waiting.... We had filled out the right forms as our professional CPA did it for us. What is you advice for me??

Thank you!!

Being taxed on your credit???

I read where someone asked if they will be taxed on their credit. As with any other credit given you will not be taxed on it. You will however be required to report any interest paid on the return for the year it was paid. Meaning if you receive your credit plus interest in 2009. Then when you file your 2009 tax return you must report the interest paid as income.

Sent Check today!!

Sent out my amended return on July 23rd 2009 and called today August 21st and was told check went out today!!! woohooo only 4 weeks!

Mine took about 4 weeks too

Mine took about 4 weeks too (sent on July 24th). Just got the check in the mail today!

1st time home buyer credit

Who did you do your ammendment with? or did you do it yourself?

Can you help me please. I am a single parent of 3 in oak park, michigan and I need this credit really bad to buy a home that i am trying to close on by Sept 1st

Thanks

248-632-0742
Lacriesa Banks

There is a place on the form

There is a place on the form where you list the date you closed on your house. You can't file before you buy. You can do this. temp change your w-4 at work so they don't take any Federal withholdings out. Save that money toward buying. Just remember to change it back later on. Oh and this is for filing for 2009 not amending your 2008. You can file this at the link listed above (for instructions)

It is my understanding

It is my understanding that you cannot receive this refund until you have closed on your new house.

Got my check after 4 weeks!

Got my check today with a little interest. They mailed it Aug 21st and received it today Aug 24th . hope the rest of you get it soon.

Did you send in your

Did you send in your closing papers is that why you are getting your refund back so fast? I wish someone had given me that advice. It seems unreal to me that we sent in what they are asking for and we are under review. I wish I had known to mail in closing documents. Now I am in limbo I and I have the papers just sitting here and they are not asking for anything yet.I am going on 15 weeks and some are getting theirs back in less that 4. It would take 1 phone call to our courthouse to verify that I have bought a house. All of 5 minutes.

Same here, except I've been

Same here, except I've been waiting for almost 19 weeks now.

You are kidding!?! Where

You are kidding!?! Where are you from? I'm from Indiana and was told it would be 8-12 weeks and then 12-16 weeks! I hope I have your luck!

Arkansas

I'm from Arkansas and have been told the same thing as you 8-12....12-16, they keep telling me to call in a month, that it is processing, well i have done that twice and just got told to call back in a month again...such BS, I dont think they have the funds to give out.

It is BS

I am from Arkansas too. I was told in the beginning mine was processed and should be mailed in two to four weeks. Well after the fourth week was up, they said that it wasn't showing up on my account, the credit wasn't when before it was on there. They said it had been deleted and didn't know what else to tell me. I just don't understand how it can be processed one minute and credit applied and then it is deleted. Has this happened to anyone else?

I am from Arkansas also

Have your forms been turned over for examination? I am told that mine have been turned over for examination and they might request more info or they might take them back out of examination and send a check. Who knows they have been in examination since early July. My forms were received by the irs on May 27th.

Refund status

I called the 800 829-0582 ext 462 and got through to a human very fast. I have her name and ID number too. I mailed my amendment and the 5405 form and nothing else on Jluy 28. She said the system shows my refund of $8085.49 will be sent out to me on Friday, August 28th.

Tax Credit To Be Mailed 8/28/09!!

Just wanted to let you know about my tax credit! We closed on our house on 7/16 and immediately filed an Amended Return and put it in the mail on 7/21. I called the IRS on 8/7 to find out what the process was going to be like. The rep was very nice and informed me that they had already received and processed our paperwork on 8/5 and that I should expect to see it in the mail in the next 2-4 weeks! I just called today to find out what our status is and this rep (again, very nice) told me that it is set to be mailed on 8/28 in the amount of $8,072.06!! Very excited! If we do indeed receive it then our time frame from date of mailing will have only been less than 6 weeks!

I am trying to get the

I am trying to get the number to call to check the status on my first time home buyers tax credit refund.

tax credit

Did you send any proof of the home purchase? I have heard that you should and I didn't.

Thanks, Kim

proof of purchase

I was advised to include my settlement papers when i mailed in my second return (a big no no by the way,apparently)but when I called to check on the status,the irs agent told me our check is to be mailed today,and it probably helped that i had included those documents.My theory is it cant hurt anything to give them more proof your home purchase is legit,They must be overwhelmed by returns that dont qualify or people attempting to rip off the government.Good luck!

taxes

Please update when you receive it! :) Gives hope!

Homebuyer's Credit

I mailed our amended return (only the 1040X and 5405) on July 7, 2009. I spoke with an IRS rep today (August 20, 2009) who said that our amendment was received in July and basically told me to wait two more months for our return and to call back in October if I had not heard anything yet. About the only information he gave me was that our credit should be direct deposited since our original return was given to us in that manner - has that been everyone else's experience?? He basically told me to wait for our return to show up some time between October 29, 2009 and November 26, 2009!!! How is this method stimulating anything?? I guess I shouldn't have expected anything less...by the way, we bought a house in Santa Barbara County, California and processed our amendment through the Fresno IRS office.

direct deposit

I have been told when I call that they will not direct deposit that I will receive a check regardless of the fact that my returns are always direct deposited.

re: Homebuyer's Credit

I am appalled!!! I have mailed out my credit some time in May after my Taxes since it took effect after I filed. Anyway I called them at the end of July , a nice helpful rep told me that it takes up to 8 to 12 weeks, and my stuff is under review/investigation and I should hear something or get a check by Aug, 8th or 12th as the time will be up, I called today 08/20, and got another rep who was not helpful was talking repetitive and was not informative, basically they moved up the review date to 16 weeks in July, the fact that I called in July and it was not 16 weeks is beyond me, my stuff is still being investigated, he cant tell me nothing more as they still have 2 days for the week 16 to hit....I am so confused and bothered by this...what is there to review? How come there is not a concrete answer, like I am calling about some one else’s paper work not my own, a big secret. If I didn’t need it, I would have never bothered to get this credit, this is aggravating.

AUDITED FOR AMENDED RETURN FOR FIRST TIME HOME BUYER'S CREDIT

I understand exactly how you feel. I mailed my amended return on 04-10-09 and was told that it was received on 04-14-09. I was first told that the process takes 6 to 12 weeks. Then after I didn't receive it the first of July, after it had been 12 weeks, I called again. I was then told that they had to increase the amount of time it takes to process these so I should receive it by 08-08-09, yet another month. I called yet again on 08-14-09 and was then told that my return could be "reviewed" (nice way of saying audited) but the rep didn't know for sure. I asked to speak to her supervisor and she told me that her supervisor would tell me the same thing. This particular rep was not not very friendly and I was getting pretty upset during this conversation myself. I called again today (08-24-09) and was told that my return had been chosen to be audited. I asked how long this would take and was told that if I haven't received my return by the 20th of September to call back. It's a good thing I was not depending on this for a down payment when I bought my house. By the way, I purchased my house in February and am wondering if I'll receive this return by February of 2010!!!!

Same Thing

I got tired of being told so many different things every time I called, so today I called the Tax Advocate, you can find your states online. She told me she is calling to look into it herself and will call me later today. I hope she can help and if so I will post back and let you know.

How American

first of all I would like to say that the amount of whining on this page is pretty amazing. "where is my free money" "it's been 4 seconds and I haven't received my free money" "they said this was going to be easy and it is too complicated for my tiny american brain to comprehend"
seriously folks, if you needed this credit to buy a home then you probably shouldn't have. I'm 29 with an 800+ credit score and decided to buy a home this year because the prices finally dropped in PDX. I in no way need this money to keep up with my mortgage or buy a boat or some other frivolous american stuff. when I get it (I really don't care how long it takes) it will go right back in my savings with the many thousands of $ that I have in there even after dropping $8600 to close. so please stop your whining people. you will get your free $. and really, it's the IRS. what did you expect?
anyhow, there are also some helpful folks on here. props to "happy now" and "word to the wise" on sharing useful information. I was told that the HUD is the only thing that I need to attach with the 5405 and 1040X, but I see mention of other closing documents. I have a huge stack of closing docs so I'm not sure which ones. if anybody has specifics on this then let me know as I'm sure it will be helpful to others as well. thanks to those posting useful information

you sounds to me that you

you sounds to me that you are broke a** hell.because for one if you had the 800+ credit score and all of the money in you savings you would not be on the site with your broke a**. Mr or Ms im 29 years old .

Free money?

You're ignorant. It's not free money. I worked for that money you're getting, you foolish little man. So why don't you just send it to me when you get your check?

y'all are some angry ({})'s.

y'all are some angry ({})'s. makes me glad the IRS is messing with you. but please go ahead and take your frustration out on me. I just pointed out that y'all are a bunch of whiners and you got mad cus it's true. and what a lack of info on this site. the hottest topic is mine cus all y'all want to do is complain. I just love messing with gullible people. anyhow I will stop now. I hope all your whining makes the IRS give you your free money faster!

AMEN!

AMEN!

if you don't need it...

what are you doing on this site? And if you already have "many thousands" why did you have to wait for prices to drop. Why? Because you're like the rest of us. Trying to take advantage of a great buyer's market and some cash incentive.

How about you buy yourself a friend- because with that attitude I'm sure you are very lonely.

A True Blood American

I am a 25 year old with a 800+ credit score and I bust my butt for my money and no whiney brat will tell me i don't deserve it. Good for you if you don't need it then don't apply. I bet you got yours quickly or you wouldn't be insulting those who have been waiting for it. I don't have to have it to afford my house I did my homework before I purchased a house just as you did. But paying off my car or PMI or school loans would help me. So learn a lesson from those around you who are looking to improve their lives and not pat their backs about how much they have in the bank. Yes it is the IRS and its pathetic that our president +/or government can't do two things at once. Cash for clunkers and house stimulus is too much for the gov't to comprehend. The helpful folks are those that are frustrated with our government and demand more action on their part to fix the economy. I also invest in a 401k and stocks and bonds and Roth's. So sue me for wanting to plan for my retirement since I won't get it from Uncle Sam.

How American Returns to Ground Zero

wow, yall are some upset folks. in response:
"arrogant" - why shouldn't I file if I don't need it? I pay taxes too. I have student loans and a car loan. my point is that I didn't buy a house and absolutely need the $8000 to be able to pull it off. I just waited till a good time to buy and there happened to be a credit. of course I am going to take advantage of it. I have been responsible with my money. and nice assumption that my parents gave me the $. sorry but no. I have 2 degrees and a job in environmental consulting (something that helps lots of people, not just myself) so all of my 3.5% down was my hard earned money.
"How Americanly Broke you must be." - not not really. I have a good amount of money. I found this page because I've heard differing responses to what all needs to be attached to the 5405. some say none, some say just HUD-1, some say other closing papers. I just wanted to clarify and most of what I saw was people complaining
"American" - you are right. I didn't mean to bash all Americans. sorry to sterotype us all. I just read a lot of whining about people wanting their free money now. as others have said, if you really needed this to buy a house you probably shouldn't have.
"How can you come on here and" - sorry lady. you and I both know the IRS sucks so I'm not sure why you are so shocked. and yea you have to pay yours back. sucks for you. should have waited longer. it's just like the stock market. I've made bad calls before and lost out. that's life. I'm sure you will be fine but whining really isn't going to help. try some yoga or deep breathing.
"Maybe your tiny little" - uhhh, I did read the website. as mentioned they DO NOT clarify what closing all documents you need
"Seems as if ..." - I believe you were one of the people who I commended in my first post for being sound. you are right. I brag they whine. same thing. I just found it annoying. so now they all have someone/thing else to take out their frustrations on. good post. almost makes me want to apologize to all the whiners. almost...
"really....i am so glad that" - two words "LIFE CHOICES" I didn't knock you up. maybe you should have thought of the consequences when you were on your back. oh and I work pretty hard for not that much money doing something that I believe helps the world. it's not like I am raking in the $. I just don't buy stuff that I don't need or can't afford. but yea go ahead and complain. but it won't change anything. and even if my response is mean I do hope you get yours soon. hopefully if you have girls you will educate them to not have children when they can't support em.
"" How American" We are so" - of course you want your money. I just found it odd that most of what was on this page was complaining. oh and thanks for continuing that trend by not telling me what papers to send in. but you are right, my smarts did figure it out!!
so in conclusion, I really didn't mean to piss you people off. well maybe a little. I just figured you might expect that the IRS would not be timely in giving you your free money. I mean it's the IRS people? what do you expect. I really do hope you all get your money soon. but whining really isn't going to do anything. haven't you ever heard of "the secret" just imagine that you are going to come home to it today and maybe it will be there! positivity people!! you will get. until then you can be mad at me instead of the IRS;)
"the dude abides"

About Time

Glad to see someone else getting annoying with the whining bit. Just like you I am educated with two college degrees. I definitely do not make tons of money at my job but save as much money as possible. Very rarely do I buy items that are not needed. I commend you for saying what needs to be said. People are all about what they have instead of what they need.

"" How American" We are so"

"" How American" We are so" - of course you want your money. I just found it odd that most of what was on this page was complaining. oh and thanks for continuing that trend by not telling me what papers to send in. but you are right, my smarts did figure it out!!

O.K. I am thinking you just like to stir people up. Sorry I did not tell you what you needed to send you ticked me off. The truth of the matter is when I sent my return in I sent just what the irs asked for and I had no clue that sending in closing documents would speed things along. That was 3 months ago. Because of this site you know to send those in and you will not have to wait as long. I think what is so upsetting is the returns that are processed in less than 4 weeks and some are pass 16 weeks it is frustrating. I am told something different everytime I call. I will not die waiting for this money nor will I go hungry but I still want it. I knew your smarts would figure it out good job.

arrogant

you are very arrogant my friend. You should not file for the credit if you don't need it. This credit is meant for first home buyers who do not have the parents with money to loan them or give them as yours probably did. There are a lot of people that do not have 15-20000 to put as a down payment and they continue wasting their money living in apartments. Housing is what caused our economy to collapse and it is what will get us out of this downturn. What a great chance to get more people to own their own homes.

How Americanly Broke you must be.

"How American" I'll bet this guy or gal is totally broke! If he had all this money and great credit, HOW did he wind up on this page????? I'll answer that...HE/SHE was looking for it to find out when his or her money was coming in...lol That's how all of us here found this site right?..we were looking for an answer of when our money would arrive. Ignore this person, he's probably worst off than we are.

American

I believe you are living in America, living free and receiving the same tax credit that I and everyone else who just bought a home will receive. Interesting that you bash Americans yet you are taking advantage of the American lifestyle. Interesting. Move to Canada.

How can you come on here and

How can you come on here and bash people and act like you are so much better than everyone else with your 800+ credit score and the big pile of cash that you seem to want to brag about? For some of us, that money is in no way free. I purchased my house at the end of 2008 so I WILL be required to pay this money back over the course of the next 15 years. So, for you information I am on here whining because the government is essentially giving me a loan and I want to know where it is. Do you honestly believe that they will let me jerk them around for months and months when it comes to getting the repayment that is required on my yearly income tax return? I think not!!! My husband and I have been waiting for 22 weeks and still nothing. Everytime I call the IRS they somehow manage to extend the time. So, I will be whining on here as often as I want, not that it's any of your business anyway. Just for your information, we do need this check at this time because when we purchased our home we were financially sound but with the decline in the economy, my husbands job is no longer as stable as it was and we are needing a boost to help us out and again, that is none of your business but I thought I would clue you in as to why so many people are on here whining about free money! There are many of us in the exact same boat!!!

Maybe your tiny little

Maybe your tiny little american brain should read the IRS website to figure out what forms you need to mail in.

The fact is that the IRS misguided people about the time line of this credit. Many of us would've happily waited until next tax season to send this in. The 1040x says 8-12 weeks, the IRS says 16 weeks, lady at my local IRS office said 20 weeks. This is government inefficiency at it's best. They can update immediately when I call in their computers, but it'll take them another month to print and send a check after my case has been processed?

17 weeks and counting.

How american

After all that you said...I have a question for you....Why are you here?hmmmmmmm

Seems as if ...

You just came here to brag. Well I don't need the money either. My house is brand new and I scored such a great deal on upgrades and appliances. I'm going on a nice vacation in a couple weeks. When the money comes it comes.

This is the internet! These people have the right to gripe if they feel like it. Just like you had the right to come in here and brag. You're no better than anyone complaining by doing what you're doing. Everyone isn't in the same financial boat. We applaud you for saving and achieving your 800+ credit score. One thing pops into my mind though. You had to be curious and want to know when the money was going to come as that is why the majority of the people find this site. There is no emergency need for the money for my family either but when we're told "hey buy a house and you get this tax credit" human nature causes you to inquire about it when things seem out of the ordinary. And besides, who doesn't want to see there bank accounts increase by $8000?

People were told different time frames that they would receive the money and many people are beyond that time. Give them a break and let them voice their concerns.

So thanks for coming here to brag. I'm sure it made you feel good about yourself bagging on people who don't have as much money saved as you or an 800+ FICO.

Nicely said

Thank you for replying to 800+...I feel the exact same way!

really....i am so glad that

really....i am so glad that some of us are living at the top of the pile and don't have to worry about money...but not all of us are so lucky. your comment totally sickens me! try being a single mother who receives no child support, works two jobs and takes college courses and tries to supply her daughter with a nice home and a good quality life and look at her and tell her to stop whining. so happy for you that you can take the check and put it in your big pile of cash in savings...but not all of us are so lucky...and we complain because we work our A's off.

" How American" We are so

" How American" We are so glad you are doing so well. Why don't you just not send in that paperwork and it will just be one less return they will have to process. I don't believe I have ever said that I could not keep up with my mortgage payment. Maybe some of us would like to have our money so we could buy a few things.Is that o.k. with you? Me and my "tiny american brain" would be more than happy to go shopping and stimulate the economy. I think the point is that we were told 8-12 weeks and for some of us that has turned into 18 plus. I did not need this credit to buy a home but I chose to go ahead and buy one because of this credit. I don't see it as free money I see it as a incentive to buy a home and as usual our government cannot keep their end of the bargain. By the way this "tiny american brain" decided not to tell you what papers to send. With all of your smarts and that HUGE credit score and all of that money in the bank you should do fine.

The IRS Is Bogus

My wife and I bought our house in good faith in this January and filed immediatley for the $8000 credit. We Our now 19 weeks later and after multiple calls still being told to be patient. This is not a stimulus, it is criminal misconduct and the IRS should be held liable.

RE: The IRS Is Bogus

My wife and I are on week 19 with still no word on when it will come. My wife is calling the advocacy number for the IRS to report that we've recieved little to no help from the Atlanta based IRS division.

2009 Home Buyers Tax Credit

My husband and I were married 15 years and recently divorced in Feb 2009. The marital home loan was in his name only. He still resides at the home. I have since moved and purchased my own home in Mar 2009. Would I qualify for the 2009 Home Buyers Tax Credit?

Married: One person 1st time buyer

I have read all over the internet and have two very different answers. Has anyone been in my situation? I owned a house. Then got married. Sold the house and bought a new one with my husband...his first house. Does he qualify for half of the credit?

you should have bought the

you should have bought the house in your name only then you would have got the credit

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