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Personal Tax -> First-Time Homebuyer
Credit
First-Time Homebuyer Credit
The refundable
First-Time Homebuyer Credit expired for most taxpayers for 2011. Some
military personnel and members of the intelligence community were still
able to claim the credit in 2011 for qualified purchases.
First-Time Homebuyer Credit Repayment
The IRS is no longer mailing reminder letters to
taxpayers who have to repay the credit, and they no longer have an online lookup
tool to check your repayment obligation.
This tool will provide account information to
help you report your repayment obligation on your tax return. You
will need your Social Security number, date of birth, and complete address
in order to use the tool. If you file a joint return, you will only
be able to access your own portion of the Homebuyer Credit account
information.
The tool that used to be available provided:
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the original amount of the credit |
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annual repayment amounts |
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total amount paid, and |
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the balance left to be paid |
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You were able to print the information for your records, and for
your tax preparer.
To add the repayment amount to your personal income tax
return, report it on line 59b on Form 1040. If you make an installment
payment, you don't need to attach Form 5405, First-Time Homebuyer Credit and
Repayment of the Credit, to your tax return. If you are repaying the
credit because the home stopped being your main home, you must attach Form
5405.
Prior information:
To qualify for the credit,
you must have purchased a principal residence, or entered into a binding contract to
buy one, on or before April 30, 2010, and closed on the home on or before
September 30, 2010. The credit was also extended to current homeowners who
are long-time residents of the same home, and were purchasing a new
home. The new law also allows people with higher incomes
to qualify for the credit. There are also new benefits
that apply to members of the military, Foreign Service and intelligence
community serving outside the U.S.
To qualify for this credit:
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the purchase price of the home must not exceed
$800,000, and |
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the purchaser must be at least 18 years of age on the
date of purchase, and |
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the home must be located in the United States, and |
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the home must be used as the taxpayer's principal
residence, and |
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the purchase must close after April 8, 2008 and on or
before September 30, 2010, and |
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you must be a first-time homebuyer - that is, you,
and your spouse if you are married, must not have jointly or separately
owned another principal residence during the 3 years prior to the date
of purchase, OR |
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you have lived in the same principal residence for
any five-consecutive year period during the eight-year period that ended
on the date the new home is purchased, and the settlement date is after
November 6, 2009. |
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The credit is claimed
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on IRS Form
5405 First-Time Homebuyers Credit (pdf). See also Form
5405 Instructions (pdf) |
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on either the 2008 or 2009 tax return, for a
qualified 2009 purchase. The credit for 2008 purchases are claimed
on the 2008 tax return. For those who have filed a 2008 tax
return, IRS Form
1040X Amended U.S. Individual Income Tax Return (pdf) can be filed
in order to get a refund in 2009. |
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on either the 2009 or 2010 tax return, for a
qualified 2010 purchase. The IRS will issue a December 2009
revision of Form 5405, which must be used for:
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homes purchased after November 6, 2009, whether
the credit is claimed for 2008 or 2009, and |
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all home purchases that are claimed on 2009
returns |
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Credit for homes purchased in 2009 or 2010 (close before
July 1, 2010):
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is either 10% of the purchase price or $8,000,
whichever is less, for single taxpayers or a married couple filing
jointly. The maximum is $4,000 for married filing separately. |
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is a maximum of $6,500 for long-time residents, or
$3,250 for married individuals filing separately. |
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begins to phase out for taxpayers whose modified
adjusted gross income (MAGI) is more than $125,000 (previously $75,000), or
$225,000 (previously $150,000) for joint
filers |
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is reduced to zero for MAGI of $145,000 and more, or
$245,000 and more for joint filers |
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is fully refundable. A homebuyer with no
taxable income who qualifies for the credit may file for the sole
purpose of claiming the credit, and receive a full refund. |
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does not have to be repaid, as long as
the home remains your main home for 36 months after the purchase date. |
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Credit for homes purchased in 2008:
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is either 10% of the purchase price or $7,500,
whichever is less, for single taxpayers or a married couple filing
jointly. The maximum is $3,500 for married filing separately. |
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begins to phase out for taxpayers whose MAGI is more
than $75,000, or $150,000 for joint filers |
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is reduced to zero for MAGI of $95,000 and more, or
$170,000 and more for joint filers |
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is fully refundable. A homebuyer with no
taxable income who qualifies for the credit may file for the sole
purpose of claiming the credit, and receive a full refund. |
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must be repaid over a period of 15
years |
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Repayment exceptions:
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If you die, remaining installments are not due.
If you filed jointly and you die, the surviving spouse must repay his
half of the remaining repayment amounts. |
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All remaining annual installments become due on the
return for the year that you stop using the home as your main
home. This includes if the home becomes a vacation home, or its
use is changed to business or rental property. There are special
rules for involuntary conversions. |
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All remaining annual installments become due on the
return for the year in which the home is sold. If the home is sold
to an unrelated taxpayer, the repayment is limited to the amount of gain
on the sale. If there is a loss, the installments may be reduced
or even eliminated. |
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If your home is transferred to your spouse, or as
part of a divorce settlement, to your former spouse, that person must
make the remaining installment payments. |
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IRS information:
Tax Tip: For 2010 home
purchases, the credit could have been claimed on either your 2009 or 2010 tax
return. Compare your 2009 and 2010 incomes (MAGI). You may have
qualified for a higher credit on the 2010 return if your income was lower.
Revised: July 10, 2020
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