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

Return...

12 weeks and now being reviewed WTF??? I dont think I will ever get my return. Called the IRS waited forever to talk to someone then get hung up on. Then again waited and get hung up on. This is a joke if we owed them money they will be harassing me everyday asking where it is? But if they owe me money it gets put on the back burner.

under review

called irs and wold told after waiting 11 my return is under review. what does this mean. i was told that this doesnt mean that they may request additional info but will take another look. does anyone know what this means

me to

they got mine 05/18/09, and they told me the same thing. I have called them everyday for a month and STILL no word. I do know they told me they have 1.5 billion to process by hand so I'm thinking no news is good news and they are just slowwwww....I should of had mine by 09/07/09. I mailed mine 05/11 and I think I was a week behind before all this hit. I should of mailed mine earlier!

I filed my amended return on

I filed my amended return on July 1, sending in my 1040X and 5405. When I called the IRS on August 10 they said they have not received my forms. I never trusted snail mail and should I resend it or am I being jerked around. Also after reading the 1040X and 5405 there not much on the forms should I send in something else as proof i purchased a home.

IRS wants a copy of your HUD

IRS wants a copy of your HUD form... this is the $ disclosure form that popped your eyes at closing

I was told pretty much the

I was told pretty much the same thing. I have been waiting for 12 weeks and I called and was told that I am being "examined for audit " and that they have till Sept. 13th to send me something in the mail and to please wait to call back till after that date if I have not received anything. What a blow that was here I am excited everyday thinking i am going to get the check and now I have to wait some more.

Under review means they are

Under review means they are looking ar your income vs. the amount you paid for the home to get the credit. You will probably get a letter in the mail requesting that you send a copy of your closing sheets and deed/mortgage. They should have told you that when you called. I'd try again and you may get a better agent willing to be of more help. I've already had to fax in several of these for clients.

same thing happened to me

This is going on with me to. They have my closing documents so I don't know what else they would need. Should I be mailing them additional stuff? They rec'd mine on 05/18 2009 and I still don't have my check either. I have never heard from them but I call them

Yes we called last week and

Yes we called last week and our file was being reviewed, then two days ago we got something in the mail requesting a copy of the final statement settlement. We mailed a copy out to them today so we are really hoping it won't be too much longer now that they have already one over some of our info :)

After you have faxed these

After you have faxed these in for clients did they receive their checks? I have wondered why they did not make it mandatory to send these papers in to begin with. It seems like it would have cut out down a lot of hassle for them and us.

Frustrated!!!

So after reading everyone's comments my husband and I decided to call and check our status of our first time home buyers credit. 5 weeks ago on the day we thought our lovely check would come we received a letter stating we needed to send in the 5405 form, we did and mailed it out that following monday. Today the woman my husband spoke to said we will be receiving yet another letter in the mail because it was being reviewed!!! I definately feel frustated with this whole matter being told orginally 8 - 10 weeks and now working on about 5 months and now it will be even longer! It feels like they dangled this opportunity in front of home buyers to get everyone out there and now are finding reasons to slow up the process. We havent owned a house in over 4 1/2 years so we are not sure what the problem could possibly be. If anyone else seems to be having the same problem and can shed some light on this whole process it would be greatly appreciated.

Thanks
Stacy

SAME HERE

MARCH 20,2009 NOT RECIVED MINE YET.

Direct deposit on the refund...

I had Turbo Tax do all the work for me (the filling out part of it), so I printed it up and mailed it out on July 13th and the print out said it (the $8K) would go directly into my account cause when I filed my '08 taxes that is where I had it go. So my question is has anyone had this direct deposit of the $8K? From what I understand, the process is quicker than if they had to print a check. Does anyone know anything about this???

I did the same thing. I

I did the same thing. I just called, it will be mailed to the new address as a check. They don't DD this refund.

The IRS does not direct

The IRS does not direct deposit amended returns. They are all mailed out.

direct deposit

I know of two people that received it in 3 weeks direct deposit (one was told the check would be mailed to them, and it actually showed up in their bank account!) . Unfortunatly I sent in my amended return the first week in June and the process has been "extended" three times! There is no telling when or how i will receive my return.

It's not the policy of IRS

It's not the policy of IRS to direct deposit on any amendment. The check will come in the mail.

HELP

Im pretty sure the people who are telling us the check is being sent tomorrow is being scammed. I just called and thats what they told me. Please let me know if this is happening to anyone else

Land and Home

Do you know how much land can be purchased at the same time as the home for the credit? I am looking at 90 acres and a house.

Still waiting on our tax credit

We bought our home on June 18 and had filed an extension back in April because we knew we were buying a home. We received a letter in July needing the Hud-1 statement and they said it was in review. We faxed the info they needed and also mailed it on July 24. When I called on Monday Aug. 3rd they said it has not been assigned to anyone yet and they have no record of recieving the info yet. She said to call back at the end of this week. Has anyone been in review or examination and recieved their money yet?

ticked as well

I am upset as well especially because I know 3 other individuals (one of which sent their amendment in a MONTH after me!) and all received theirs within 3 weeks. I am not on my 9th week and on the THIRD phone call to the IRS I was told that it would be an additional 12-16 weeks! That is unbelievable. How can someone file at a certain time, someone else file after them, and it takes one person 3 weeks, and the other 16weeks!!???? I am very frustrated in the whole ordeal and I didnt realize how much extra money goes out of your pocket when you first buy a house (like a fridge, etc) and now I am going into debt waiting on this money! What a GREAT incentive plan!

Me Too

I am in the EXACT same situation, you are not alone. This sux.

Replying to your waiting situation

Hey- Mine is in review, it took me three phone calls into the stupid hotline to find this wonderful news out. I settled on 4/30, mailed in my amend on 5/14, and everything was received on 5/18. I find out today, during my third phone call, that my amended return is "under review". But, I can't speak to the people reviewing, to find out what they need to process, and I have yet to receive ANY request. I asked if I could leave a fax number or e-mail address for the reviewer, and apparently they refuse to communicate electronically. All I know, is that my "zero percent interest promotional period" runs out at the end of August, and according to Mr. Hudson at the IRS, I can look forward to paying interest, instead of receiving my credit in time.

WONDERFUL, so glad I went out and bought my first home, and even more glad that I made such a reasonable reliance on the news that it would only be an 8-12 week window to recieve your refund, not 20 weeks +, which Mr. Hudson tells me is "much more reasonable given that my amend is under review".

Awesome. I wish you two better luck.

same boat

They got mine on 05/18 to. I am in the same boat, no check yet. I am sooo peed off!

Like you, I am in review as

Like you, I am in review as well. I spoke with someone at the IRS today and they informed me that it takes them 5-10 business days to even record that they have received the supporting documents they request. After that, it takes them 2 months to review it. So, like me, you will have to keep waiting for another couple months. I think this process is ridiculous and I am sick of waiting. Good Luck to you!!!

Same problem

I am dealign with the same problem the irs said the never received my 1040 x I had sent it in april so after 12weeks of waiting I sent in another form and now the have somehow received the other one back in may and supposedly I will recieve it in august unless they have other issues and they said instead of it taking the 8-12weeks it now can take up to 16 weeks what a pain

My husband and I sold our

My husband and I sold our primary residence on May 3, 2006. We closed on our new home on May 5, 2009. Was just wondering about your thoughts on the whole
'3-year' thing. Do you think we qualify?

It is supposed to be 3 years

It is supposed to be 3 years to the day - based on the dates recorded after closings take place. You should be ok.

Stamped by the IRS on 04/29 14 weeks

Has anyone recvd direct deposit or does it come in a check? How many weeks has it taken to recv the funds? Thanks

Refunds come as checks

We were told today that our check should be mailed on August 14, 2009 with $78.32 interest. We had our original tax return direct deposited to our bank account but was told we will receive a check in the mail.

I wonder though will they be sending the check to our original address or the address to the new home we purchased.

I let the agent know the original address we listed on our return is defunct...and that the new address is where we currently reside which is why we filed the amendment.

She didn't seem to care just asked for the entire address said the check will be mailed out on August 14, 2009.

Has anyone received their checks to their new address or the old?

Address

On your 1040x there is a box that has to be checked if you wanted to change the current address (from your last filing) to the new address (on the 1040x when you purchase your new home). If you don't check this box you will need to complete and IRS form 8822 and mail it in to the corresponding office on page two fo the form.

We let H&R Block do ur ammendement and this guy was stumbling through this process. He DID NOT check the box so after 7 weeks I had to complete this form. After he completed I questioned why I paid $100 for this service. But I thought it was a much more detailed process.

They say the process takes 3-4 weeks after they receive the adress change form. No, you can't just give them the new address over the phone. Even after you divulge all your personal information identifying yourself. You have to sign the form and mail it.

I am going into week 10 now so. If they have mailed it, it went to my previous address which is an APO address in the UK so it would take another 2-3 weeks after that. And that's even if they forward checks. Could be just returned to sender.

This may not be a related

This may not be a related reply, but I wanted my comment up top. I filed my amended return July 8th, and I just called today, August 7th, and the rep said the check will be mailed August 14th. A week from today! I said I provided direct deposit info, but she said the money will still be mailed as a check. Maybe they don't do direct deposit for larger returns? I will also be getting $8,062 and some change. The $62 and change is interest since my filing date, awesome!

Being stalled and Frustrated out

Glad to hear that someone did actually receive a tax credit check. When i called a month ago the rep that i spoke with told me everything looks fine we have everything we need the process is taking longer because of the high volume of amendments this year. Well today, my 16th week anniversary, the rep tells me that they are missing form 5405 and my paperwork will be mailed back to me and i will need to send it back in and start my wait all over again. But i have an even better plan i will wait , file the credit on my 2009 return electronically so that i know exactly when i will get it if there is not a problem. I honestly think that every one of us that is still waiting is being stalled and eventually frustrated out because maybe theres not any funds left to support the credits.

I agree totally with you.

I agree totally with you. They received my amended return on April 17th and today is the 16th week. They keep telling me that my return is still being "looked" at and to call back on the 14th. And that everything "looks" good, but it is still in the processing mode. They are just taking forever because they know they don't have to pay interest on amended returns as well. I'm frustrated too!!

The money does come!

I initially wrote the post "just wondering". My husband and I have not recieved our check but my sister and her hubby had their tax return amended, after the purchase of their first home, and mailed it off just a week or two before we did and yesterday they got their check! So yes, the money does come (along with interest)!

Check came Today

We applied for our credit at the end of April, and our check finally came today. It took 14 weeks for us to get it.

tax credit

Hi, my husband and I ammended ours on April 30th and are still waiting impatiently. I heard that before you get the check, the IRS first sends out a letter letting you know that a check is on its way. Is this true?

this is a load....

They are jerking us all along. My amended return was received April 10. My 16 weeks was up last Friday, July 31st. I called Friday, and I called today, and they've told me my 16 weeks isnt up til August 10th, that they actually measure weeks by 4 weeks per month. They don't even know how many weeks and days are in a month. The rep also told me it can take up to 3 weeks after processing to get the check cut and mailed out. I am more than upset about all this, I feel misled into buying a home that needed some work as opposed to buying a new home. The government said I would get this money to make home improvements, yet we're all left high and dry. My home needs a new roof bad, and I'm sure others have more serious problems that we are forced to neglect because of the IRS's incompetency.

No one said that you had to

No one said that you had to buy a home of lesser value, such as needing work, as opposed to buying a home that did not need repairs. No where in the new home buyer tax credit information does it say that your home has to be of lesser value and need repairs. Sorry about your problem, truly, but its not their fault you bought a home with so many problems. This tax credit is helping people out and that is why so many people are encouraged to buy a new home, however it should be obvious that it will be a lengthy process. Have patients. Be glad you are getting a FREE check that you would not otherwise be getting and that you don't have to pay it back like those did in 2008 with the 7500 credit.

Checked Stats Today

My wife and I closed on our house on 8 may 2009, and I filed the 1040X on 12 May 2009 via mail. I enclosed a copy of my closing documents to show proof, not sure if it made any difference or not but I figured it couldn't hurt. I did the paperwork myself, it wasn't too hard. I called the IRS today (12 weeks +1 Day) and they stated the return + interest will be mailed out on 7 August 2009, this Friday. A total of 8091.69. Not bad...I even got interest, lol.

Hi, Would you kindly be able

Hi,

Would you kindly be able to provide the number you called to check on status of your return?

Thanks
Ian

IRS number

The number to call is 1-800-829-0582 Ext 462

A farce

The people who have commented on this board about their checks being "in the mail" must be IRS plants. Get back to us when you actually RECEIVE the checks. We closed on March 20th and amended right away, although IRS says they didn't receive the amendment until April 27. We're still waiting and it's August 3rd. I was told not to expect anything until September. Seriously, who has actually received one of these checks? Why isn't this getting more attention? The cash for clunkers legislation is peanuts compared to this credit and the press covered that story like it was the most important event in our lifetimes. Who has actually received a check? Why exactly does the IRS keep extending their own self-imposed deadlines? How much money is reserved for the program? How many people have filed amended returns equaling how much in credits? How much money remains for the program? This is a debacle!

checks received

I know how you feel... my best friend and his boyfriend bought a home together and settled a month after I did, they mailed in their tax amend a month after I did, and they have both received their returns (they split it 50% ownership each, so each got $4k back with interest) about a month ago.

I, however, have not received squat. Aparently, I am one of the unlucky people who were subject to "random review and selection"... there was another person who posted about that. But, it took me 4 telephone calls into the hotline to even get someone to advise me of such. I am at week 14, and still nada.

:( So, though I wish it were a scam we could sue about, apparently some people are being done right by the IRS...

Hope that puts your mind somewhat at rest.

Thanks for the laugh, Matt.

Thanks for the laugh, Matt.

I received my check in the mail, today. I am not a plant, as far as I know :)

I closed on my home on June 27th and I wonder if mine processed so quickly because it was less than the $8000. My purchase price was only $62,000 and my rebate was $6,200.

The refund stipulation I

The refund stipulation I believe is $8000 or 10% whichever is less. That would explain your $6200 refund on a $62k home.

Closing tomorrow..if I ammend my 2008 taxes?

If my husband and I ammend our 2008 taxes for the tax credit for buying in 2009 will we have to pay it back since in 2008 the tax credit was $7,500 and had to repaid?

If you bought in 2009, then

If you bought in 2009, then you are going to be claiming the $8000 credit, not the $7500 credit. The old one was repaid over 15 years begining the 2nd tax return after claiming it. The only reason you would have to pay back the $8000 credit is if you don't live in the home for the require amount of time, 3 years I think, you would have to look it up to make sure.

If you did claim the 7500 first, you can amend that for the 8000 and get yourself the other 500 as well as being under the terms of the new credit.

If you havn't filed yet though, I would suggest you wait until your 2009 taxes are filed and claim it them, I am at 21 weeks and counting and the irs just told me they have another 8 weeks to do something about it, total BS.

Where's My Refund on IRS site will not help for Amended returns

http://www.irs.gov/individuals/article/0,,id=200571,00.html

Per IRS website, Amended return info is NOT available online...

They say:

"Please note: Amended tax return (Form 1040X) information is not available on Where's My Refund?.
If you are looking for amended return information, please contact our customer service representatives at 1-800-829-1040."

No Return Yet Either

I sent my Amend in We bought our home March .I mailed in the amend in April One IRS rep says it was received on April 10 and when my 12 weeks was up they said no wait we did not receive it until April 27 well when my 12 weeks was up they then told me that it had been moved to 16 weeks . Well I called last week July 24 and the lady told me that they received it on the 10 th again and my 16 weeks was up on the 31st which is today now the person I talked to said no your 16 weeks is not up until 8-14 no l letter has been sent out he looked at the return said all the paper work is there and it is in the process stage but not been approved yet . I think these people are dragging there feet on purpose they must have orders. So I am not sure about getting it or when I might not get it until next year who knows but they should not tell people about it and get there hopes up we need to do some improvements to the house we bought that is the way we are going to pay for them it just is so furstrating at this point. And the fact you can't talk to the person that they say your return is with. The number to call is 1-800-829-0582 Ext 462

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