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

2006 homeowner

we purchaced a home in 2006 do we get any first time homeowners credit?

2006 Home Owner

No. For the $7500 Home Buyer Credit you needed to have purchased your house after April 8, 2008. For the much juicier 2009 credit after January 1, 2009 and before November 30, 2009
Christopher Jenkins, CPA

Buying Separately

My husband and I are buying a house but he will be the only one on the loan or deed. We file our tax returns jointly, but are unsure if we will get the full refund. We made last year 90,000, so it is above the individual income level. Since we file a joint return does that mean that we will get the full 8000 credit?

Tax Return

I also have not seen the check (we qualified for the full 8K) and its 7 weeks since I mailed the amended return. It'd be nice if someone out there has received their credit, but I can't find anyone who has.

Buying Separately

With a joint return and the facts you gave you would get the full credit.
Christopher Jenkins CPA

taxreturn

i filed my 2008 tax return with hr block do i need to go back to them to file a amened tax return , or can i file myself ?

Tax Return

You can file it yourself or use anyone qualified to prepare taxes.
Christopher Jenkins CPA

mother co-signing....

My husband and I would like to buy another house but need a co-signer.My mother has agreed to co-sign for us but she qualifies for the first time home owners tax credit. If she co-signs with us before she buys her own home will she qualify for the tax credit?

Mother Co-Signing

If all she does is cosign but doesn't move in with you she would still be eligible for the first time home buyer credit if she later buys her own primary residence and it would not impact your ability to claim the credit. If she moves in with you she would be leigible for the credit since it would be her primary residence.
Christopher Jenkins CPA

Can we both get the credit?

My boyfriend and I are looking for houses. Neither of us has ever owned a home before, so we would qualify for this. Can we each get the $8000...totaling up to $16000? We obviously file our taxes separately, so we are wondering if this is possible.

Can We Both Get The Credit

You could both get the credit but don't plan on moving in together for three years after the closings. If you do whichever house you leave will stop being your primary residence and you will owe the credit back
Christopher Jenkins, CPA

Per Property

I think its based per property, so you'd get 4k a piece. That being said, you should talk to a tax professional about your options.

Per Property

The total credit is per property so $8000 but the IRS will allow any reasonable method of spitting the $8000. They have specific guidance on their website re this exact situation

Credit for my brother???

My husband and I are buying a home. We have everything set, except for the mortgage. My husband starts his job on August 1st and we want to close on a house on June 30th. The mortgage company will not let us as they do want a month's worth of pay stubs. We have given them a contract for the new job.

My brother is willing to put his name on the mortgage and provide a months worth of paychecks to help us close on June 30th.

My husband and I and my brother are all first time home owners. If my brother lives with us in the home. Could he claim the tax credit as a first time homebuyer and both my husband and I claim the tax credit. My brother is a bachelor and will file separately and my husband and I will file jointly.

Thank you for your help.

Tax regs

You will definitely need to speak to a tax guy. Your brother would need to be on the deed to claim the credit, but I think the credit would be split amongst you. It may be better, especially if your brother isn't planning on living there for 3 years, that he not be on the deed. To claim the credit you still need to meet all of the other requirements.

first time home owner tax credit

how can i see if the irs has received my form and find out when i will get my check do they have a contact number where i can talk with someone

IRS website

There is a link on the IRS website to check the status of a refund. You'll need your SS#, refund amount and filing status.

I was seriously injured at

I was seriously injured at work, have recovered after 10 years,Iam working etc.. I lost my house in new york , but now live in Pennsylvania. do i qualify for first time buyer in Pennsylvania ? the house in new york was 10 years ago

Qualifying

Since it was 10 years ago, you meet the non-property ownership requirement. You'll need to meet the other requirements as well.

income limits

i'm buying a house. my husband and i would both be first-time buyers, but he will not be on the mortgage (and thus -- at least for now? -- not on the deed). we filed jointly for 2008.
which income limit applies to the credit: a 75K limit on my income b'c i'm the sole buyer? or still the joint 150K cap b'c we filed jointly?
many thanx for your help!

150

Since you're married, the 150k will apply per the guidelines.

complicated situation

My fiance is planning to purchase a home in the next couple of months. Since he hasn't owned a home in well over 3 years and makes only a certain amount of money, he WOULD qualify for the tax credit.

The mortgage WILL be in his name only since my credit is terrible. (I owned and lost a home due to foreclosure. Long story.) Just another detail here, but I lost my home to foreclosure in 2008/2009. (Sheriff sale was in fall of 2008 and I was officially kicked out of my home in spring of 2009.) Obviously to receive the tax credit, I cannot be on the deed. However, at what point CAN I be on the deed? For example, we might get married a couple of months after he buys the home. Considering we live in a no fault (for divorce) state, I think technically that would make the house a marital asset once we were married. I WOULD like to be on the deed for obvious reasons, but will I be forced to wait three years to be placed on the deed in order for him to receive the tax credit?

Also, another crappy situation. My fiance has a son from a previous marriage who will be 18 in the summer of 2010. My fiance pays child support and will have to of course until his son is 18. He religiously pays child support, however he did have a hiccup in the fall of 2006 with child support. He had the misfortune of being laid off and consequently was unemployed for part of the year. As a result of that, he got behind in child support. Currently his child support payments include back payments for child support. So, let's say my fiance buys a home prior to December 1st 2009 and qualifies for the homebuyer tax credit. But he also owes child support (including some back payments) until summer of 2010. Will his ex get all of this tax credit money? (Will she get any of it?) Can he file for a tax extension and wait until his son is 18 to claim the tax credit since he will no longer have to deal with child support?

child support

They will with hold from your federal, my husband was also laid off for 2 months last year and behind 1000, they took it all out of our federal return. Actually, the total refund was deposited then the 1000 was taken back out 1-2 weeks later. You cant stop them so be careful and dont spend the money. Just an FYI.

I think when someone owes

I think when someone owes back child support, the only tax return money that can be held and given to the child's mother is from the State return. Since this is a Federal tax credit I think you'd be safe.

That is actually incorrect.

That is actually incorrect. The state and federal returns are both open to being taken to pay the back child support. The way it is supposed to be(the way it was explained to me by family services here in Missouri) is that if you owe more than $500 in back child support your federal refund is capable of being intercepted, but as I found out this year it is all in what is still being reported that you owe that matters. I had an arrears amount of $402 but was still flagged for feral interception due to the payment being received and not reported in time. In the state of Missouri any back child support owed can be intercepted, which then goes into a hold account for 45 days and then applied to the balance owed. Each state is different but the federal portion is universal.

72-year old Mother Never Owned Home

I currently own a residence. I am seeking to purchase a home in which both myself and my mother will reside. My mother is 72-years old, and is not nor never has been a homeowner. If she is used as a joint purchaser on the loan, but her income is not factored into the qualification process (only mine), would her status as a first time homebuyer still qualify for the $8,000 credit in 2009? Where does her name have to appear -- on the loan documents or the deed -- in order for her to qualify for the credit?

Thank you,

first time home buyer credit

I've read some of the previous questions and answers on mobile homes. How can I tell if our mobile home is considered "real property"? We have a mortgage on our mobile home but live in a mobile home park and pay lot rent. We do pay property tax on the mobile home. Does that make it "real property"?

It doesn't matter-We have a

It doesn't matter-We have a mobile home on rented land,title only in Husband's name-The IRS said we still have owned a principal residence,so neither of us will qualify for the credit-If any person owns & has used in the past 3 years a mobile home,houseboat or coop apartment,they do NOT qualify.The IRS said even if we divorced,I could not qualify(name not on title)because community interest laws & they are not going by single State rules,they are keeping that rule straight across the board!So,because we have an old mobile home that we pay lot rent on,we can't get the credit.The American dream is to own a solid home with real estate.

same situation

I am in the same situation, except we don't rent the land, our mobile home is sitting on my mother's property. We are just paying on the mobile home & have to pay taxes every year on it. Don't know if we would qualify?

First Time Home Buyer Tax Credit

We are helping a friend purchase her first home. She would like to get the credit by filing a 2008 return. She is not required to file since her income is under the filing threshold. Can she file now or should she wait till 2009.

Owned a mobile home but did not reside in it.

I purchased a mobile home in 2001 and it was listed as real property. In February 2006 I moved out and into an apartment with my new wife and rented out the mobile home. I have since transfered ownership to an individual (approx 1 year ago). So, since I was not living in the mobile home in the past 3 years but still legally had ownership do I qualify?

Mobile Home

At the point you started renting out the mobile home it stopped being your primary residence so you would qualify for the new Home Buyer Credit 3 years from that date

My husband is not a US Citizen

Hi,

My husband and I were married in November and are about to start the application for him to get a greencard. I am a US citizen and he is Australian working here on an E3 Visa. If we were to buy a home jointly (our combined salary is under the minimum) before he gets permanent residence, would we qualify for the full $8000 tax credit? What about if he has his greencard. Basically, does buying a home with him affect the amount of credit we can receieve if we purchase the home together?

My Husband is not a US Citizen

Short answer you get the full $8000 credit subject to income and purchase price limitations.

Longer answer
If both of you were non US Citizens one of you would need to qualify as either a Resident Alien or have a Green card. If you owned property overseas that does not disqualify you from being considered a first time home buyer in the US

Rent to own

I am trying to move into a home that will be sold to me as a rent to own. Can I qualify for the first time home buyers credit if I do this?

Rent to Own

You are not eligible for the credit until the closing happens

8000 credit

My boyfriend and I are buying a house,which one gets the tax credit some people are saying we both would get the 8000 tax credit because we are not married is this true?

8000 Credit

You split the credit using any reasonable method. You don't each get the $8000

Double Tax Credits

I qualify for the first time home buyers tax credit of $8,000 but also qualify for a credit from my local city of $3,000 - can I get both credits since one is federal and one is state??

Partners

I bought a condo last year and got the mortgage in only my name but I added my partner's name to the title. Does that mean she doesn't qualify as a first-time buyer?

Partners

Adding her name to the deed gave her an ownership interest so she would not qualify as a first time home buyer
Christopher Jenkins CPA

Renting

I qualify for the first time homebuyer credit and am purchasing my first home. My boyfriend and my brother plan to live with me and help with payments (rent). Am I allowed to claim the credit if I am living in the house but renting out rooms?

Qualifications

As long as you meet the guidelines, there isn't anything stating you can have room mates so long as the property owner lives in the residence for at least 3 years.

mobile home

My husband and I currently live in a mobile home in a trailer park and are working on purchasing a new home. I was wondering if we will be considered a First time homebuyer due to the fact that we do not own the land it is on(we pay lot rent), we have never claimed mortgage interest or real estate taxes on our income tax return. The mobile home is in my husbands name, I have never owned a home. I am thinking that because there is no deed, and we don't own the property and the title comes from the DOT we would still be consider first time home buyers...What do you think?

Mobile home

Sounds like you'll be fine since you don't pay property tax....its not considered "real" property.

Newly wed

This is a two part question. I’m active duty military and I sold my home back in 2008 because I got reassigned. That was the first time I purchased a home, I used the VA loan and I was single with no dependents. I now live in another state, I recently got married and my wife has never been in the military. My first question is, if we buy a home together would we qualify for the First Time Home Buyer Tax Credit since this would be the first time she would own a home and we both make under 150k . Second question would I be able to qualify as a new home owner for the VA loan, would getting married change qualifications for that loan.

And if we don't fully qualify for the whole tax credit, what approach would you advice we take to qualify for the whole ammount?

Thank you

Mobile home...

I currently own a single wide, old, mobile home and am purchasing a real home here in a couple of months. My mobile home has a lein on it but the title is in my name. It is treated as a motor vehicle with a title and tag that I pay though the DMV yearly. My wife and I have lived here for the past 3 years off and on, about 50% of the time. The mobile home is in a park that we pay a monthly lot fee for. Is there any way we can qualify for the first time homebuyers tax credit? Thanks!

Mobile Homes

I am a Realtor in the Sioux City, Iowa area. A customer of mine asked if he would qualify for the $8000 tax credit for first time Buyers. He now owns a mobile home.

Not Real Property

Since your mobile is considered a motor vehicle and not real property, you should be able to qualify, provided you meet the other requirements.

Not Married and Never Owned a Home

My fiance and i are planning to get married soon . We want to get our house first. However, im wondering if we marrie before November 30, will this disqualify us for first time home owners?. Neither one of us has ever owned a home. I f we marry in three months are we still consider first time buyers?...

Post new comment

The content of this field is kept private and will not be shown publicly.