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

From what I have read,

From what I have read, particularly on the IRS website, neither of you qualify for the credit. Sorry.

No. Unfortunately both

No. Unfortunately both people have to be first time buyers. If you have not owned a home in 3 years, then you can claim the full amount.

Review for Audit?

Has anyone been told when they checked on their status with the IRS that they will be getting a letter about being 'randomly audited' to make sure that everything is correct? The lady told me that it can take up to 30 days. I sent in my amended form on the first week of May and I just checked on the status today. Summer is coming closer to an end and I've got some projects to finish! A person that I know had sent in their form the same day I did and already got their return last week. Anybody else have to go through this 'audit' period and can share their experience with that? I was hoping to see this money about now.

I am in the same boat

I sent my amended return in the first week in May also and have called now 3 times, 2 weeks ago I called and the lady told me that I was picked randomly to be audited also and that there was a letter issued to me on August 11th regarding that I have a PO Box where I get mail and that my home has a physical address.....I told the lady that alot of people out there get mail at a PO box so what does that have to do with holding up the return, and she doesn't know but still today being August 25th never received a letter, they said it could take tell September 11th before I get the letter then another 90 days for a return. I am so frustrated with the IRS.

REVIEW FOR AUDIT?

Yes, I've been told the exact same thing. I sent my amended return in on 04-10-09 and was told that they received it on 04-14-09, so that's how long I've been waiting.

I to have been told the same

I to have been told the same thing. I asked why and they said I was picked randomly. It may take up to an additional 30 days. well thats up and now they have done a referral for my case to "hurry" it along. But the auditor has 90 days to respond to that.
If they want more information than why have I not received that request - it is like my return is just sitting their in limbo on someone's desk. Can they find it? Is it Lost? Its a joke - just tell us the truth and quit beating around the bush - I can send every document I have but they will not let me until I receive a letter for it. Save the postage IRS - I will just send it to you. I am now at 21 weeks with nothing from the IRS, not even a letter or an answer to any of my questions!!!

I sent my return by my tax

I sent my return by my tax preparer, funny thing is I do taxes myself. I sent it in and it was accepted July9th at that time the wait was SUPPOSED to be 4-6 wks.
I called again last week and they said I was in a random audit. They received it into audit July 20th. Now from July 9th to July 20th what were they doing??
The lady was really nice and I verified all my info again. She explained they probably would keep it in audit till August 30th, then either kick it back for processing or I would receive a letter September 18th requesting more info.
I did ask about direct deposit, she said if the banking info was on the original return it would go into the bank. They cut checks on Thursday night or Friday mornings.
I will call on the 30th to see what the status is.

I was also told I am being 'randomly audited'

I also sent mine amended return in May and I have received the 'randomly audited' speech 4 times. I have also been told that I will receive something in the mail . I was told this 3 weeks ago and I still have not received anything so I called back yesterday and was told it is being reveiwed for audit but it might not actually be audited therefore I might not actually ever receive anything in the mail asking for more paperwork. They are just deciding if I will be audited. Every time I call I am told a different story. I think they just say whatever they can to get you off the phone. I was told yesterday for the most part to only call back if I have not heard anything by the end of September. I will call back every week!!!! I am amazed that I see post on this site about not getting upset and it is free money and we could of bought a house and not got anything. The truth of the matter is a lot of us bought houses because of this refund.Which was exactly what credit was intended.We kept our end of the deal. That does not mean that we could not afford the houses we bought it means we were promised something and told that it would take 10 to 12 weeks and now that has been changed to 16 weeks and counting. And our government wants to run health care.JUST IMAGINE!!!!! On a more positive note everytime I have called I have been treated very well and with respect until yesterday. The lady yesterday was not very friendly maybe she was having a bad day.WHERES MY REFUND!!!!!

Review/Examination Process

I just wanted to let you all know about my experience with the review/examination process.

My return was sent to examination on July 16 and I recieved the letter requesting additional information on August 4. I faxed the information the same day. The IRS says that it was recieved on August 6 and after calling today, they tell me that they are already in the process of closing the review and that I should be expecting a letter dated for August 14. They said the whole process should take about 60 days but I dont' think that it will be that long considering I have already been waiting 22 weeks. Hopefully, this will be helpful to someone

called IRS today

Hooray! We mailed in our amended return on 7/31/09, for a home purchased on 5/13/09. I just called the IRS, and was told that our check is scheduled to be mailed on 8/28/09.

Wow, that's impressive! I

Wow, that's impressive! I hope mine goes as smoothly as yours! The IRS received my returen on 8/12. So far I've been told it will be 12-16 weeks... Would love to have it sooner. So here's hoping that I'll have your luck!

IRS number

Hello,
I just wanted to know if anyone can give my the phone number you called to find out the status on your $8000 Tax credit return. I close on a house on June 30 and amended my taxes on July 15. I mailed it in on July 17. We still haven't recieved our refund yet. So if you have the number you called it would very helpful for us. Thanks!

Builders want an extension

Home builders are looking to congress to get the tax credit extended. I have read that if the credit was extended it could possibly add 383,000 new home sales over the coming year, which would create about 350,000 jobs.

IRS accepted return on July 9th 2009

Hi all! I check this site from time to time to keep my hopes up about the chances of receiving the credit. I have read some pretty funny posts! Anyway, I called about 2 weeks after I mailed it just to be sure it was received. It was received on the 9th of July. As you know, still waiting... Which is fine, when it cones to the IRS, I have little expectations and know nothing is for sure unless you owe!! I did notice however, that many more people are starting to receive the money promised and I say congrats on the new home as well as receiving the check! But... I wonder if the length of time one has to wait has anything to do with location. So here's my request...IF YOU JAVE RECEIVED YOUR CHECK OR HAVE BEEN ADVISED IT IS IN THE MAIL, WOULD YOU BE KIND ENOUGH TO TELL US WHEN YOUR AMENDED RETURN WAS RECEIVED AND WHAT DATE YOU RECEIVE YOUR CHECK AND WHERE IN THE U.S. YOU ARE OR FILED? Thanks in advance and I am eagerly awaiting your responses!!

just wanted to say I closed

just wanted to say I closed Aug 3rd and mailed the 4th. I called and they said they received it the 10th. it was processed the 14th. I called back yesterday and they said my check is scheduled to be mailed on Sept 4th.

Thanks for the number

I have a story just like many do, about the time frame on the first time home buyer program. I have been waiting since April 8 on my tax credit check. Thanks to The lady who posted the advocate number on Aug 13 titled Amended return ,I did call the number , 877 777 4778 And now have an advocate . Hopefully They can speed up the process . Thanks for the number

Advocate

Can you tell me what the advocate can do to help it along. After 12 weeks of waiting (She mailed it May 7th) my daughter got a letter that they are being reviewed and to send in a HUD 1. She mailed the HUD1 on August 15 and they said it could be another 2 months. so we are talking 6 months total unless they need more info. That is why I am wondering what an advocate can do.

According to the IRS rep ...

I contacted the IRS today and I was told that on 13 August there were some "adjustments" made to my case on 13 August and now a check should be mailed out not later than 11 September. I'm not sure how accurate that is but it's good news for now but we will see around 15-16 September.

I asked her will my address change form be processed in enough time for the check to go to my current address. She stated that she could change the address over the phone. So I read off my address and I could hear her typing and she read it back. Now if she was just BSing and didn't really update it who knows. I did send in the 8822 to change the addreess a few weeks ago so hopefully that gets processed in enough time. Just FYI I will be hitting week 11 this Friday.

IRS Letter

I called the IRS and was told that a letter was sent out letting me know when will i recieve my refund. does any knowe how long does it take to ge that letter?

Check Arrived!

I've been reading this blog daily and have posted a few times about our waiting situation. Here's my rundown --

Closed on first home on March 27
IRS received ammended return on April 9 via snail mail (1040X and 5405)
Called IRS in middle of June and was told to wait longer
Called IRS in middle of July and was told to wait longer
Called IRS this past Friday (8/14) and was told to expect it this week
Received check in mail yesterday (8/17)!
TOTAL WAIT TIME = 18 weeks, 4 days
TOTAL CHECK AMOUNT = $8,097.90 (interest!)

As for all the requests from the IRS for additional paperwork, I'm not sure why some do and others don't. I'm wondering if some folks are being "randomly" selected to provide this as proof because of the recent fraud attempts? At no point were we contacted to provide a HUD-1 or any other info. I think the key to this whole thing is patience.

Our return did "change assignments" around week 9 and they said that can hold things up a bit. Not sure of what that means, but it sounds like a common thing from what I've been reading. The number I used to check the status was 1-800-829-0582 x 462 and expect to wait between 15-20 minutes.

We did book a trip a few months ago for October in anticipation of this money. We received it very much in time, but I would like to reiterate what someone posted earlier -- be wary of counting on this money for future plans if your plans are in excess of 18 weeks out.

Thanks to the mods running this site. I was so happy when I stumbled across this and was able to share and read about others in my exact same situation. Have faith everyone. I was skeptical as well. It's a big, old waiting game but it's very worth it and the frustration gets quickly replaced with excitement when you open that mailbox and see that check.

STILL WAITING

Lucky you. It was 18 weeks for me 08-14-09 and still haven't received the check. I was told today that mine is now being audited!!!

IRS Envelope

Did the check come in the "gold/orange" IRS envelope? Just wanted to know if I should get excited if I see one in the mailbox.

It did indeed

It looked identical to a standard annual tax refund from the US Treasury.

Envelope

Thank you for replying!!

Received Credit

I just wanted to let everyone know that I received a check for $8,064.25 on Aug. 17 2009. I purchased my home in May 09 and filed for the amended return on July 3, 2009. The only form I even filled out was the 1040X and the 5405 (First Time Credit Form). I never had to provide any supporting documents and even scratched out my old address, and wrote in the new one and just initialed next to it. I called the number IRS number provided on this website and last week and I was advised it was approved and the check would be mailed on Aug 14, and that I should receive within two weeks. Well that was Fri and I received the check Mon. Hope that reassures people they will get their checks.

received our check !!!!

Our accountant mailed ours out on the 21st of July and told us it would be about 6-8 weeks at that time, i did call IRS about the first week of August and said they did receive it on the 24th of July but not to call back till November (12-16 ) weeks. But much to our surprise we received it in the mail today!!! September 8. lots of prayers is all I have to say.
Good luck to all of you, it will come............

OHIO FILERS?

Has anyone in Ohio successfully received their refund? Sent mine in the first week of May, called today (8/17) and the IRS rep rudely told me there had been no change since the last time I called, Yes , apparently they note on the "account" each time you inquire about your refund.

Also waiting in Ohio

I am still waiting after 22 weeks for my check to come. I have been in review since July 16. I was told they did recieve my information that they requested on August 6 and someone was assigned to it. The rep told me that I should recieve a letter by September 6 stating that they did recieve it. So, I still have no idea how much longer I will be waiting but by September 6, I will be up to 24 weeks. If my calculations are correct, that is 6 full months of waiting and I am really getting angry. They keep telling me to just be patient but I think 6 months is a little long for something that was supposed to have only taken weeks to complete.

News

Ok I just talked to the IRS again and found out some info your case gets assigned many times before it gets done. If you have done a rent to own and you have filed your taxes with the address of the house you purchased in the past then you have to be examined and could be asked to provide more info like your HUD sheet and stuff. But at worse case if you go over your 16 18 or whatever weeks Your Check should go out no later than October something worse case which is where a lot of us will be. If you do the Advocate thing you will be put in a line of importance as well and they will just as busy as the IRS because the IRS is so backed up and they will have you call your advocate when you try and get info from the IRS directly so it could cause more waiting instead of helping. just remember you will not be there only person either just like you are not he only person that IRS person has on there desk. It is frustrating waiting on a check that you thought would be here in a short time but more than likely you will get it unless you are trying to scam the IRS which in that case you should not get it anyway. And the longer it takes is because of those who tried or did scam the IRS and they have to look at everything harder now. But it will come and just think at least in October we all should that have been waiting now 16 weeks then 20 something will get it if you are correct in the way you have filed and no letters have went out to you. I have been in the system since April 27th and still waiting and I will be ok I have something I need to do but I will have to wait throwing a fit will not make it happen sooner and I can't just go and do it myself so I have to wait I wish it was quicker but nothing I can do.

I just called the IRS today 8/17/09

Yay... I just called the IRS today 8/17/09 and was informed that my refund should be sent out by the end of this week which is 8/21/09. I filed my amended return 5/26/09. I'll let you all know if I receive it nxt week.
The # that i've been callin is (800)829-1040. Jus dont push any options and stay on the line.

Could you tell me if yours

Could you tell me if yours had been turned over for examination or not? I sent mine on May 27th.

Regarding Examination or not??

Unfortunately my amended return was not sent out for examination.

8000 Refund

I filed an amendment to my tax return on July 13th. I recieved a letter from the IRS on August 14th dated August 17th stating that the refund is on the account and I should recieve the check within 2 weeks. Has anyone else gotten a letter from the IRS dated 2 days in the Future from recieving it?
Just wondering if that is the date the check will be mailed.

Yes I got the same letter

I got a letter today dated for August 24, 2009. A quick call to IRS and they told me my check was going in the mail today - August 21, 2009. Did you get your check yet ? Call the IRS to get the date they are mailing it.

IRS Refund Information

To check for the first time home buyer credit refund, you need to call 1 800 829 0582, and when prompted, enter extension # 462. Make sure you write down the operator's name and ID number for documentation to create a paper trail. You may need it later. I didn't get the first operators id nor name. (Make sure you check the box at the top of the form that asks if you want to make an address change--that way when you call to check the status, if your new address is showing, you know they have received it).

Here's my story. I filed an amended return 1040x, and the form 5405 on May 29, 2009.
I first called July 6th to check to see if the return had been received. The operator told me at that time, there was no way to check. Everything was being done by hand. I was told to wait the 8 to 12 weeks before checking back. She said if I didn't hear anything by the end of July, that I should refile the forms and write "DUPLICATE ORIGINALLY MAILED ON ***** DATE", at the top of the form. She also told me that if I didn't fill out the form the right way, I should refile.

I called again July 31st. That operator was much nicer, (wrote down his name & ID number at his suggestion). He informed me that there would be no way to check until the forms were processed. The IRS won't enter them into the system until a check is going to be mailed out (within 2 weeks), or there is an issue with the return and more information is needed, or the filing is being investigated for fraud. I told him what the previous agent had told me. He said absolutely do NOT refile unless it has been more than 16 weeks and you have NOT received any requests from the IRS for more information.

WARNING ****** DO NOT REFILE UNLESS IT HAS BEEN 16 WEEKS ***** The IRS will automatically flag duplicates as FRAUD and launch an investigation and it will delay your return by months!!! ******

I called again on August 3, because I had been given some very good information by a tax friend, who said......if they have your new address and you DID NOT fill out a change of address 8812, then that means they have received your form. The operator I spoke with on that day, advised me that yes, since the address had been changed in the computer, that would lead him to believe the IRS had in fact received the form and changed the address ( the IRS does not change your address unless you mail it to them in writing or their form *** a previous agent had told us the IRS changes your address when you put in a change of address with the US Postal Service.... THAT IS INCORRECT).

That operator also told me that the back log and delays were being caused by loan processors and tax preparers erroneously advising people to file for the credit, even if their loans had not gone through on their homes. Their reasoning was, by the time the IRS gets the forms processed, the loans would have gone through and it would cut down the wait time on receiving the money. What this has done has created a huge paper back log because when the agent assigned to the return tries to verify the purchase, if the purchase has not been recorded and there is no proof, the agent has to automatically assign it as a FRAUD case, which means, that agent is now tied up with the paperwork until the fraud investigation is completed and can NOT start processing another tax payers form. So far, in just the Kansas City, MO office, the small staff were already working on 125 individual cases of possible fraud.

The IRS staff was told to start advising the public that it would take 12 to 16 weeks instead of the 8 to 12 weeks. Also if you made any other changes to an amended 1040x other than the form 5405, it would delay the return.

I was told at that time, the best thing to do was wait til the end of August, call back to check status and if after Sept. 16, I had not received any information - then I should re file with a letter of explanation and make sure to mark on both forms in red ink - "duplicate - refile - other form potentially lost " and to make sure to put my phone number at the bottom.

The best news is ... I called again today, August 17, 2009. It is my brother's birthday and he has red hair, so I rubbed his head for luck before I called. lol I was informed that my return had been processed and indeed, my check would be mailed on Aug. 28, 2009. which would be exactly 12 weeks from the date I mailed it. I do love my brother!!!!! lol

FYI....I am not an IRS plant. I do not work for the government.

The very nice lady at the IRS explained ... yes, they are overloaded with paperwork. The two biggest problems were....fraudulent filers and incorrect paperwork.

If you are going to be filing --- make sure to read through the form carefully. The wording is not the best and it can be confusing. Make sure you check the "change the address" box at the top of the forms and include your phone number at the bottom of the form where you sign. You can send the forms certified mail or overnight - to show receipt that they were received ----but you need the actually land address of the IRS processing center for your area. Call and get that first. You can not send certified mail to the PO BOX numbers, no one is there to sign for them.

KEEP a copy of what you mailed and the date you mailed. When you call, get the operators name and ID number and the date/time of the conversation. Create a papertrail in case you need to call the Tax Advocates office (they can assist you with problems with the IRS. Here is they're website http://www.treas.gov/tigta/important.shtml )

BEST of luck to you all!!!!

Do We Qualify????

So me an my fiance are buying our first home, from my granfather. I understand that I would not qualify for the tax credit because of this, but will my fiance qualify since we are not yet married? Will it make a diference that both our names will be on the mortgage?? Any help would be greatly appreciated!! I am really in the dark about this.

My fiance and I also bought

My fiance and I also bought a house together. Because we are not married, the return will basically be split in half. $4,000 for him, and $4,000 for myself. We both qualified for the credit. Both of our names are on the mortgage. We each filed amended returns, and are anxiously awaiting the checks! I'm sure that if your fiance qualifies, he can just amend his taxes for the entire $8,000.

Multi Family/Single Family?

From what I gather, the fine print on the credit reads that a house has to be a single family. A property I am looking at has two detached homes on one lot, not a duplex. The town and the appraiser have it classified as a single family property but the HUD statement would list the two addresses, one for each house. Any ideas if I could still claim the credit if I bought the place?

I looked at a duplex and my

I looked at a duplex and my understanding is that you are only allowed to claim your primary residence. If your primary residence consists of 50% of the property then you are only allowed to claim 50% of the purchase price. How you divide that property up into primary vs other residence is to you. Doesn't matter if it's a duplex or a trailer park, only the portion that is your primary residence can be claimed. There is a blog out there of someone who did just this thing, she gets into a lot more detail. Google it, sorry can't remember the name of the blog.

Still waiting too

We closed on our house April 3rd 2009. Sent all the papers in..waited and called. They told us to send more papers in, which we did..Now, every time we call they say "still processing, call back"..It's now been 18 weeks and no check..And I don't expect it anytime soon..If we had owed them money they would have been knocking on our door by now. I think it's ashame how the IRS can do people like this and get away with it.. But what can you do?

Word to the wise

These are things I wish I would have known BEFORE closing on our house so I hope this will help some others out

-Send in a 1040X
-Send in a 5405
-Send an 8822 change of address form along with the other paperwork. Otherwise the IRS will mail you check and additional paperwork to your old address (stupid... I know)
-Send in a copy of your closing docs and HUD form with signatures from all parties
-Don't expect your check ANYTIME soon. They will probably review your case, ask for more paperwork, and then send you your check 12 - 16 weeks after that

We are on week 8 and just now received the request for more paperwork (closing docs, HUD form, etc...) So now I know not to be in any hurry and I'm still not expecting my check any time soon. Hope this helps anyone who is about to purchase their first home!

Refund sent to old address

I closed on my house May 22 and sent in my ammendment a few days later. I called the IRS 2 weeks ago and they said they had mailed it out a month ago and it had come back as undeliverable. They rattled off the address and it was the address that I moved from, not the house that I bought and now live in.... I'm not real sure how that could happen, but okay.....? They said it would have to be reissued which could take about 4 weeks. I keep running to the mail box everyday, hoping I can save myself from the debt I put myself in to fix up the house. When I moved in the house needed several things to make it really livable. I did those things, charging up my credit cards, with hopes that I would be able to carry the minimum balance until this money came. Now, that my house has had all sorts of problems from the central air going out, to having to have roto rooter come out several times, to having extremely high electric bills, and now school is starting and I am a single mom with 3 kids to buy for.... I am ruining my credit that I worked so hard to improve to be able to buy a house... It sucks. I truly with this program was straight laced and less complicated.

Refund

The checks does comes in.. I got it within 5 weeks!!!!!! I was expecting it by Nov. but I got in August 10th, sent it on July 3rd.

I'm so Happy!!! hope this helps.

Forget you...

Ya.... forget you!

--- (p.s. im just jealous)

filed amendment question

I filed an amended tax form for the 8000.00 for purchasing a home. I would like to know if everyone or anyone that has done the same sent in proof of paper work ( such as proof of purchase etc.) with the amended return. I did mine through H&R Block and they said I didn't need to send any paper work in with it. I am begining to think different and that it is going to slow the process down even longer. I have been waiting for 12 weeks and have verified that it has been received.

You Don't need to send proof.

You don't need to send proof. I didn't send anything but the forms 1040X and 5045 that's it and was told me check went out yesterday 8/21/09 and I sent in forms 7/23/09

My fiance and I also went to

My fiance and I also went to H & R Block, but our agent (a family friend) made copies of our closing documents. I'm not sure if she actually enclosed the copies in the envelope, or just kept them on file? I imagine that since she made copies, she mailed them.

file ammended question

I just read today on the instructions for the ammended tax return to allow 8 to 12 weeks for the refund. (if applicable)

What forms to send to prove the purchase of the home?

I filed in 08 and received the $7500 first time home buyer credit for a home I closed on March 2nd. 2009.

I need to file a 1040x to claim the $500.00 difference and not have to repay the loan.
Question is what forms are needed to send in with the 1040x and Form 5405? I have my final settlement report which resembles a HUD-1 form and I also have a letter from the title company stating that I successfully closed escrow on March 2nd, 2009. Is this sufficient???? Thanks for any input in advance.

Home buyer credit documents

I have the ame documents and like to know if enough to support

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