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$7500 First Time Homebuyer Tax Credit
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Update 2/12: The $15,000 provision has been replaced by an $8,000 first-time home buyer credit, according to the Wall Street Journal. The credit is set to expire November 30th unless it is extended (which is currently being discussed).
Senate Republicans added a provision that would make the credit a $15,000 tax credit for all home-buyers, not just first time home-buyers. It would also be a true credit, not a “credit” you have to pay back over 15 years.
One of the big pieces of the housing rescue bill, passed and signed into law in July, was a $7,500 “tax credit” for first time homebuyers. While experts aren’t sure whether it’s “going to work,” these types of tax credits have been used in the past so they do have some history.
There is one aspect of this bill that is surprising and it has to do with one of the qualification rules. You can own a vacation home or a rental property and still qualify for this tax credit. I don’t know if it’s an oversight because of the strict determination of “primary residence” or if it was an intended rule. I don’t think individuals who own rental property or vacation homes necessarily need assistance on buying a primary residence.
First Time Homebuyer Tax Credit Rules
To qualify, you must satisfy these conditions:
- The home much be purchased as a primary residence.
- You must not have owned a primary residence in the last three years. For couples, both individuals must not have owned a primary residence in the last three years. Vacation homes and rental properties don’t affect this (you aren’t DQ’d if you have a vacation home or rental property).
- Must not be a non-resident alien as defined by the IRS in Publication 519.
- Individuals must have a modified adjusted gross income of less than $75,000 annually and couples MAGI of less than $150,000 to qualify for the full amount.
- The phaseout range begins at $75,000 and ends at $95,000 for individuals, $150,000 and $170,000 respectively for couples.
- The home must be closed between April 9th, 2008 and July 1st, 2009.
- No mention of a credit score or history requirement, but knowing that will help when it comes to getting a mortgage. I recommend checking out myFICO.com, a service of Fair Isaac, the people who invented the FICO credit score.
How the “tax credit” works:
- The tax credit is 10% of the home’s sale price with a maximum of $7500.
- You can claim the credit on taxes filed in 2008 or 2009.
- It’s a credit and not a deduction (difference between tax credit and tax deduction).
- “Tax credit” is a misnomer because it’s really a zero percent loan with some qualifications.
Tax Credit Loan Repayment Terms
The tax credit isn’t really a tax credit, it’s really just a tax free loan with some qualifications. You have to start paying back this loan within two years and you make equal payments over 15 years. When you sell your home, any profits will go first into paying off that loan. If you sell at a loss, the difference will be forgiven… meaning you will not owe any money on the loan (though it should be recorded as income as is typical with most loan forgiveness agreements, so you will owe taxes on it).
Should You Do It?
I would, why wouldn’t you take an interest free loan? 
(Photo: orvaratli)
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I will be closing on a house in about 4-5 weeks. I have not filed for my income taxes as of yet. Can anyone tell me that once I file and if the 15,ooo tax credit passes, how it will be distributed? Will it come in one lump sum or in partial payments? Will this be in addition to whatever refund that I would normally be getting back also. How long does it take?
I bought a house in October and have already filed my taxes.. Since the 15,000 tax credit didn’t pass, you can still take the 7500 tax credit. It does have to be repaid, 500 a year starting in 2010, but who cares a no-interest loan.. Fantastic!I took advantage of this credit myself… I did my taxes on line myself and just followed all the questions. It asked me if I was a first time home buyer and i said yes. It figured out my refund for me.. I qualified for the whole 7500. That money was added to the rest of the money I was getting back, therefore making my total 8600.. I e-filed my taxes about a week ago and opted for direct deposit. I checked the irs “where is my refund” page today and it said that my refund should be deposited this friday the 13th. So once you file you should get the full amount of the credit and the rest of your tax refund. I hope this helps you….
I’m not understanding the forum – if you go to CNNmoney.com and read about the new proposed $15000 tax credit – it indicates that it is non-refundable. That means that if you don’t owe $15000 in taxes you will not get a refund – which sucks. I’m building a house based on the premise that I would have gotten the $7500 back to repay the money I had to borrow as a down payment. If this new bill passes will the old one go away – the $7500 tax credit? This new bill for $15000 makes no sense and will not help me in any way if it is not refundable – I don’t have to pay taxes so what is the benefit for me – what it has done is completly messed me up. It looks like we are getting screwed. I would like for nothing better than to be wrong – so can someone help me out here? Thanks
If this 15000 credit is the only reason you are building a house then you have issues. You should have waited and researched without blindly jumping into home ownership. This is your mistake, not the governments.
The “old” 7500 isn’t a credit anyway. It is a loan that you have to repay.
saladdin
I’ll also add that shouldn’t you just be happy you are one of those that do not pay taxes?
Isn’t that benefit enough?
saladdin
Everybody pays taxes: sales taxes, service taxes, fuel taxes, and if Sharon owns a home she’ll pay property taxes. Also, alot of people who can afford a mortgage payment have trouble coming up with the down payment.
The real question is – does somebody who makes enough to pay $15,000. in taxes need a credit?
They can even own vacation or rental property under the Senate amendment.
Further, you have no way of knowing the circumstances of Sharon’s life. I lost my career and savings due to catastrophic illness without medical insurance. I still pay taxes on my disability (private insurance that I paid for while working).
Your the one with issues.
It doesn’t take a genius to figure out the poster is talking about income tax. Stop trying to seem smarter then you are.
If you have trouble coming up with a downpayment for a house you are in no situation to buy a house anyway. Ever.
You paid for disablity insurance out of pocket but not medical insurance?
saladdin
SDDave – thanks for your response and kind remarks – BOY – the hatred on this board. I have a Masters Degree and had a decent job making decent money until my department was outsourced 9 months ago. I immediately landed another job but as a contractor with no benefits. I was told that the job would turn into a permanent position but because of the economy this is not going to happen. My parents loaned me the money for the downpayment so we wouldn’t have to go into our savings AGAIN. The only reason that I’m providing this information is because of all the asinine people that felt a need to lamblast me for saying that it sucked that the $7500 credit may be sunset by the $1500.00 credit. Yes I stared building a house based on the fact that I would receive a refundable tax credit of $7500.00 – every little bit helps. When I applied for the credit it was not free government money – it had to be repaid – who wouldn’t take advantage of an interest free loan and Yes I fully understood the terms. I suggest to all the idiots who felt a need to be so mean spirited with their idiotic responses to get a freaking life and go back into the hole you crawled out of.
You should do your research first before complaining jumping into something like a new home and then complaining about not getting free money.
They were trying to pass a bill that bumped that 7500, up to 15,000. Since you have to repay the 7500 it isn’t really a credit, so the government was trying to see if they could make it 15,000 and make it not repayable, therfore it would be a true tax credit. That would mean that they would just give you 10% of the cost of your house for free, but since the government didn’t pass it we now can only get a max of 7500. and it has to be repayed…
You are lucky you don’t have to pay taxes!! First, your an idiot for trying to “build” a home based on the need for $7500 that you have to start repaying in two years with equal payments. Second, you sound like your complaining and wining, it’s not the governments fault. . .its yours.
Well guys it looks like they wiped out the $15k idea, oh well. The $7500 is still a sweet deal and I’ll take it. Also a final note to all the winers and tax evaders, better luck next time scamming money out this country. You should be ashamed. You are the reason this country is in this mess,,,Losers!!!!
I bought my first home in October 2007, then refinanced January 22, 2009. Does this count as eligible for the tax credit?
Kmm – unfortunately, you cannot claim the credit if you only refinanced. You must be a first-time home purchaser. Sorry.
actually kmm…. if this new revised bill passes tomorrow. It looks like you will be able to.
I bought my first home on January 31, 2008 and I am strugling to make my house payments. I didn’t qualify for the first time home buyers tax credit because my home was purchased before April 9, 2008. I feel like my hands are tied. All I can do is write a letter to my Congressman. If I could refinance my mortgage at a lower rate, that would help me out, but the rates aren’t low enough yet. I hope I can make it until the rates get lower.(If they get lower). It seems to be my only hope.
Well it looks like a tru $8000 credit for Jan 1-August 31st 2009 might get signed, that sounds good to me, what does everyone think of that?? I have’nt heard the details yet has anyone else??
Ronnie: that sounds right – but only for first-time home buyers who meet the existing income requirements, etc. Nothing for general repeat homebuyers.
I purchased my house October 2008 and qualify as a first time home buyer. The Housing and Economic Recovery Act of 2008 is for homes purchased between april 2008 and july 2009, but after reading about the home buyer tax credit in the stimulus bill it says it’s only for homes purchase after Jan 2009. Am I reading this correctly? Is the home buyer tax credit in the stimulus bill the same as the tax credit passed in 2008?
It is and it isn’t – if you bought (as a 1st timer) b/t 4/08 & 12/08 (and you qualify in all areas), you get the refundable (but repayable) credit. If you bought in Jan 09 – Aug 09 you get $8,000 and no repayment requirement. That’s how I read it.
I am settling on my first home purchase next month and have been trying to get the final details. Can you give me the website you’re using to get this info?
I’m not getting from one website – it’s a mixture of cnn/cnbc/foxnews/wall street Journel, etc. However, nothing is final until it is signed into law.
Is the $8k in addition to the $7500 (total $15,500)?
No this is not in addition to the 7500 it will be one or the other.
We filed our taxes and already received the $7500. Is there a way we can file an amdendment for the $8000 and return the $7500 loan?
my sister has to co-sign or co-borrow with me on my homeloan but i will be the resident she resides in another state, it has been 5 years since she owned a home—will i still qualify? if yes, who will the credit go to me or her?
If I added my 22 yr old son as of(1-09) who lives with my wife and I, to our grant deed, will my son be eligable for either the 7,500 or the 8,000 new home buyer tax credit when he does his own taxes?
It doesn’t seem so. Your son would have to actually have to buy a home from a non-relative (in addition to other requirements) to qualify. Just adding him to a deed is not equivalent to buying a home in an arms-length transaction. Sorry.
Does anybody know if the rules are changing on the 8000? Do you get the whole 8000 when filing your taxes this tax season like you did the 7500 if you didn’t owe? or is it just a smaller version of the 15000 tax credit that only applies to taxes that you owe?.
My wife and father bought a home in 2004 (he was the primary co-signer on the loan because my wife did not qualify). We lived in the home until april 2008 because we moved. He sold that home in April 2008 and I bought a home in May 2009 by myself. Just wanted to know If I qualify. My wife was on the original loan, but not the primary owner. Thanks
My daughter bought a house in July of 2008 and filed for the 7500 tax credit and was approved. Since this 7500 is not really a credit but an interest free loan that has to be repaid, how is it affected by the new 8000 tax credit which does not have to be repaid? it does not seem fair that the 7500 has to be repaid, but the 8000 does not. Will the 7500 be forgiven and not have to be repaid back over 15 years? Anyone have information on this?
Life, nor the law, is fair. The IRS will make sure she pays it back and will reduce her yearly refund by $500 or send you a nice little letter asking for the money if she doesn’t owe taxes for that year. THose who purchase after 1/1/09 (and meet all requirements of the 1st timer statute will not have to pay it back. Fairness, I’m sure, was never a consideration of any of the lawmakers. At least she gets a 15-year interest-free loan – many get the big goose egg!
At least you are lucky enough to qualify for this interest free loan! I closed on my house just a week before the effective date. Too late to qualify for the credit but early enough to be stuck with an astronomically high interest rate, courtesy of the beginning of the housing crisis.
Sure doesn’t seem fair. I’m in the same boat as many on here. Closed in Aug. 2008 and just got laid off in January. $8,000 for free sure seems a hell of a lot better than $7,500 that you have to repay, but things could be worse. Could have closed in March of 2008 and qualify for nothing at all. Just have to be grateful for what you can get, even if you have to repay it. I just want details on how to repay early if possible. And great comment from “T” below about investing it in a CD.
An interest free loan is impossible to come by in today’s economy, so I’d say take it. I am just hopeful that perhaps sometime down the line, our administration will forgive some of this loan perhaps, realizing that things were really bad already before 1/1/09. As of today, 2/17 the bill does not adjust the repayment provision for the $7,500, but I am hopeful someday it might. Got 15 years to figure it out, right?
Good luck and peace to all.
I’m in the same boat. I closed at the end of February 2008. I have been wondering if it is legal for them to arbitrarily set a date like that since most tax laws by precedent cover the entire tax year. Perhaps it needs to be challenged.
At any rate, last week I was talking to a friend who is a tax preparer and she said that there is “talk” about extending the 2008 dates (to include the entire year) and making both the 2008 credit on that doesn’t have to be repaid as well.
whoop….I meant to say making the 2008 credit “one” that doesn’t have to be repaid as well.
Hi, I am getting ready to buy a house and was of course devasted when the socialists we call our government eliminated the 15k tax credit at the last minute. that said, my income is too high to qualify for what obama defines middle class (75k or less for single filers). My girlfriend however, fits right in, the problem being her credit is so crappy that the bank won’t approve the mortgage with her on the loan. is there any way I can put her on the deed or create a notorized contract between her and i that would indicate this as a joint purchase, even though my name is soley on the loan however both our names would appear on the deed? We really need the extra money for repairs to the house and any advice is appreciated. thanks
cj,
Are they basing your total income of over 75k or your AGI of 75k? If they are basing on your Adjusted Gross Income you can sometimes have tax deferred items, such as 401k, medical insurance premiums that could bump you below the 75k max. This is assuming you were making slightly over the max of 75k.
thanks Jason, no unfortunately i’m not close..i live in an area that has a high cost of living so my 125k salary really doesn’t make me a rich man, on top of the fact that i’ve only been in the work force for 3 years i dont have much in the way of savings.
So you are complaining that our “Socialist Government” isn’t taking (as much) money from other tax payers to give to you? That seems like a logical complaint.
I bought my home last year and I and my husband are first time home buyers my closing date is march 26th. It is farly close to that April 8th or 9th should i try to get the credit? if I do not qualify that will not be fare I have never bought a home never nor my husband.
I would not try. When you clam the credit, they will ask for Purchase Date, Property Address, and Property Type. If you took the credit, you would have enter the closing date in 2008. This would eliminate you from the credit and if taken im about 99% sure you would be audited and have the pay the $7,500 back with Interest in a lump sum.
hope that helps you..
Jason
You can’t be serious!? The dates specific for qualifications they are not ball-park figures to “try for”. This isn’t horseshoes.
Narich244
So you are saying is “to not do this at all”? Well I have a friend that will be calling IRS tomarrow and i will go with what they say I will also come and write to all of you what they said. And this only for the state of califonia.
I am getting ready to buy a house and was of course devasted when the socialists we call our government eliminated the 15k tax credit at the last minute. that said, my income is too high to qualify for what obama defines middle class (75k or less for single filers). My girlfriend however, fits right in, the problem being her credit is so crappy that the bank won’t approve the mortgage with her on the loan. is there any way I can put her on the deed or create a notorized contract between her and i that would indicate this as a joint purchase, even though my name is soley on the loan however both our names would appear on the deed? We really need the extra money for repairs to the house and any advice is appreciated. thanks
Sorry CJ, I couldn’t help but chuckle at how you started your commentary..you were “devastated when the socialists we call our government eliminated the 15K tax credit at the last minute.” Very clever passing reference to our socialist government, all the while upset these socialist aren’t giving away even MORE money?..lol That is rich!! Thanks for starting my morning with a good chuckle.
You beat me to it Jeff. Very funny stuff from CJ.
saladdin
I refinanced a home that was in my mother’s name. My boyfriend co-signed for it. Could either he or i get the credit? It is our first home.
Until the Senate and House both pass their bills and then hammer out their compromises in committee we don’t have anything final to make decisions based on. For example, the question of having to repay the $7500 credit if you took advantage of it. Or how much it will ultimately be, or if it will be refundable or not. But it seems that if the Senate has given up on the 15k and making for everyone then that part is dead in the water.
Don’t forget for now we still have to pay it back. What you don’t spend, try investing in a cd and pay the government back using the interest money.
okay here is my situation. I am married and recently closed on a house. I could not finance the house with my wife because she is considered a 1099 (self employed) at her job(something we really never payed attention to) and only has been there about 5 months which makes here ineligible for the loan as far as the lender is concerned. Will we be eligible for the full tax credit since we will be filing jointly?
Robert – I guess the main question is have you OWNED a main home in the last three years (prior to this recent purchase, of course). Also, are you eligible with respect to all of the other conditions of the credit (income, etc). The fact that you financed it yourself (without your wife on the mortgage or deed) doesn’t make a difference, I believe. Look at Form 5405 (go to IRS website), and go thru all of the requirements. It’s pretty straightforward. Good luck!
Hello,
My fiance & I are both first time home buyers. We are about to purchase a new home. It is being built and is estimated to take approximately 6 months. If we have put a good amount of money upfront when we signed the contract, do we still qualify for the 0% loan even though the house will only be finished sometime in August? I assume the closing will only be after the house is finished.
Looks like you may be luckier than those that closed before 1/1/09. The instructions for the current repayable tax credit say you may count the date you actually move in and occupy the propery rather than the closing date of the loan – so it looks like the July ’09 date on the current one won’t hurt you.
We purchased our home Nov 25 2008. That is within the time frame to qualify for this loan and it is our first home. I plan on using Turbo Tax again this year. Is there a place on there that i can claim this or will i need to do my taxes another way to claim it?
S- you are eligible for the repayable $7,500 loan not the $8,000 credit. In other words, you will start repaying this loan (in $500 increments) in 2010, I believe, if you claim it on your 2008 taxes. Just access the IRS website and search “Form 5405,” I believe. It should tell you what you need to do.
I used TaxAct to prepare my taxes. The life events Q & A under the “purchased a home” section covered this and took me the correct form and increased my refund amount by the $7500 credit. I am certain Turbo Tax will be the same. I am going to wait to file for a couple of weeks to see if the will back the non-repayable $8000 to cover the 2008 repayable $7500. If not, oh well – like others have said it is still a no interest loan that I can use for 15 years.
Another restriction that hasn’t been mentioned is that you are not eligible if you utilized a government first-time homeowner program when purchasing. My home closed on exactly 4/9 and I was thrilled that I made it within the stimulus period, but since I used a state first-time homeowner program and it paid about 5000 towards my purchase, I’m not eligible for the 7500 (or 8000) now. The 5000 I did get was a great help, but it came with a TON of restrictions including having to pay a good portion of it back if I sell within 10 YEARS. I have my fingers crossed that this stimulus package will help me. I’m glad to be a homeowner, but I lost my job (my office closed completely) a few months after I purchased and I’m pretty stressed out. I feel like I’ve done everything right – working hard, saving money, keeping my credit score really high, doing a ton of research to find a way to buy my first home relatively young etc. I got a great deal on my home and I know things will get better, I just hope I can get a little relief to survive until then.
Hello Emme-
We just closed on a home in July of 08. We signed up to use a local Chicago program called TaxSmart. We have not yet taken advantage of this program- It would give us a credit of 20% of yearly interest paid come tax time (haven’t done our taxes yet). Yours is the first post I’ve seen that makes the stimulus 7500 incompatible with any other. Are you sure? How do you know?
Best of luck to you, hope we all make it through!
Hi again-
I called the IRS today. I closed in July of 08 and I can only get the 7500, and must repay over 15 years. Really, I shouldn’t say only. It’s pretty awesome. Also, I used a local program called Tax Smart, and they said I can use that along with the 7500 credit. It turns out the form I have to file for tax smart is a federal form. hope that helps.
Hi,
I have purchased a home within the acceptable period and my son co-signed me on the loan. He owns a home already. My yearly income is only 10,000 a year. After standard deduction I won’t owe any taxes. Will I still get the 7500 credit? My concern is 1) I don’t owe enough for the credit and 2) My son owns a home.
I closed on my house 1/5/09 and filed my taxes today using the existing $7500 credit. If the $8000 credit is passed will I get an additional $500 and be free of repayment obligations? Will I have to refile or will this happen automatically?
I am in the same boat as James. Bought a house and closed on 1/30/09. I have already filed the $7500 tax credit on my 2008 taxes and gotten the refund. Can I ammend my return and get the extra $500? Will I have to pay this back over the next 15 years???? If someone knows the answer to this, PLEASE let me know!
Hi,
I just got off the phone with the IRS. I bought in Jan 09 and included the 7500 on my tax return. They said I can just complete a 1040X and will get the additional $500. They said that it is not limited by the tax liability (I thought I read it is only up to the taxes you actually owed). They said the amendment will switch it into non-repayment status. Even if you do not complete the 1040X, since you entered a purchase date of 2009, you will not have to pay it back.
I bought a house that was a bank repo. We closed on 2/28/2008 but did not move in until after April 2008 since there was major reconstruction to do. Can I still qualify for this credit or did I “miss it by that much”?
My husband a I bought and old fixer upper in April of 2008, but we closed April 4rth! Does this mean we do not qualify for this because of being off by 4 days??!!!
I am in the same boat. I closed on my house on the 4th of April also. I hope we can qualify.
Allison – unfortunately, it appears you do not qualify for the credit. Sorry.
Any idea on what happens if you were a first time homeowner and closed on your house before the 1/1/09 deadline (12/1/08 close). I would have qualified for the $7,500 “loan” – but it looks like the dates for the $8,000 credit that does not need to be paid back is post 1/1/09. Will I still get the $7,500? Will I have to pay it back?
Thanks.
I have the same question. I bought my first home in May of 08.
From what I’ve read, we are eligible for the $7500 that needs to be repayed starting 2010 and NOT for the new credit.
That is correct. You get the $7500 and you have to pay it back. Doesn’t seem fair does it? The same thing happened to my boyfriend. It’s not like it would have been that many more people… since it was only in effect since April ’08.
MD
If your son just co-signed on the loan and is not actually in title to the property which is the typical way it is handled with FHA financing then you should be eligible for the $8000 tax credit.
I am in the same boat as Allison. I closed on my house on April 4th and moved in around the 12th. I am very curious if we will qualify.
I am a non-resident alien here in the U.S., but beacuse I have been living here for some years, I am considered now a resident alien for tax purposes, do you know if this mean that I could get the benefit of this tax credit?
You don’t want to be an american, but you want our tax benefits?
I bought my home in 2008 before the first-time homeowners tax credit. Is it just bad luck or are there any other provisions? (I don’t live in D.C.)
Thanks
Tony – you’re out of luck with respect to the $7,500 credit but maybe your state has its own 1st time homebuyer credit. I would look into that.
Craig – I think you’re out of luck. The IRS considers the date you bought the CLOSING date (unless you were constructing a home, then it’s the occupancy date). Sorry – no credit.
My girlfriend purchased a home 2 weeks ago, my Mother had to cosign the loan for the approval. My mom hasn’t purchase a home in 15 years, but my girlfriend is a first time buyer. Does she qualify for the credit? It was purhased directly from a bank (Foreclosure). Please help me??????
JS-
I’ve had the same question on this site for months — does the credit apply to land contract, contract for deed or any other seller-financing arrangement. I’ll be eternally grateful to anyone who can shed light on this aspect of the credit.
My husband and I purchased a home on March 28, 2008. The house was under construction (new heating system, electric, windows, doors, etc.) so we were unable to move in until December of 2008. According to form 5405, it states that you should enter the date you first occupied the home if the home was constructed. Do we qualify for the tax credit? Thanks for your help.
I went and did my taxes and they told me i can not clam the 7,500 with my own taxes together, because we was going to wait to do our taxes utill we closed in our home and that will be in april 15th.
I bought a house in Aug 2008 with a friend. We are 50/50 on this house. Are we both able to get the $7500 loan or just one of us?
Brian – you both will have to split the $7,500 loan (in whatever manner you want). However, you both can’t each get $7,500.
I recently filed taxes under the impression that I would qualify for the first time buyer credit with 0%. Now, with the new 8000 credit, will I automatically have to not pay back the loan or will I have to amend my tax return?
Just wondering if anyone has got there normal tax refund and first time home buyers tax credit, and are there any problems I should be aware of.. I wanted to wait and see what happened after the bill passed, before I filed my taxes … I am kinda ticked off because me and my wife closed on 12/15/08 …it’s kinda of amazing 16 days can make such a big difference. I just think they should have piggyback the two credits… Because if you bought a house on Dec. 31 2008 or Jan 1 2009, whats the differance, we’re all stuck in the crap storm of an economy… sorry just had to vent..
It is NOT a loan per the 2008 7500 tax credit. This is an 8000 freebie.
Hello, I have A question that I am not sure about. I bought a house Oct 7 2008. It was in “bad shape” Unliveable. It was so bad I had to get a 9 month construction loan just to buy the house. I had to do a total restore and I just got a real 30 year mortgage Jan 29. I am just now moving in the house. Where I had the construction loan can I put my closing date tha last of Jan 2009???
Thanks,
Unless you built the house from the ground up (major renovations do not count) – your purchase date is the date you CLOSED – not the date you occupied. It appears you qualify for the repayable $7,500 loan.
I am in the same boat as James. Bought a house and closed on 1/30/09. I have already filed the $7500 tax credit on my 2008 taxes and gotten the refund. Can I ammend my return and get the extra $500? Will I have to pay this back over the next 15 years???? If someone knows the answer to this, PLEASE let me know!
You can ammend for the additional $500 and I’m almost entirely sure you won’t have to pay any of it back, because the credit is retroactive til 1/1/09
I am so confused. It seems like some people are filing for a first bought home even if it was before April 8th of 2008. We closed on our home on March 23rd 2008-what luck! Can we still file for anything? Do we just tell our tax guy to check a box? help!
Well Lucy – if you “fudge” the date you closed (which you would have to do on Form 5404), you would be committing tax fraud. I don’t know about you, but a measely $7,500 loan isn’t worth an audit and all the headache and attorneys’ fees you’ll be incurring (as well as penalties, interest).
well thats exactly what a couple of people i know did (see earlier post) they claimed it on houses the bought 3 years ago and indeed got the 7500.00 for it. now they are shopping and taking trips, go figure
This new 8000 credit is free money. Why does the 7500 have to be repaid when its all part of the same bill and they moved the date back to January 1st when we had a different president. Something sounds illegal here.
Kathy – It’s not all part of the same bill. The $7500 tax credit was part of the stimulus bill that was passed in 2008. The $8000 tax credit is part of the bill that was signed this week. They are totally separate things.
Well, not entirely. The current $8000 credit cuts the $7500 credit time frame in half. The $7500 was supposed to run from 4/1/08 to 7/1/09. Now the $8000 credit starts 1/1/09 and ends 12/31/09 and the $7500 ended on 12/31/08. So if you bought a house last year you have to pay it back but if you bought it this year you don’t.
I have to pay it back. =(
Would I still get the tax credit if I have a FHA loan with down payment assistance?
I don’t know about the down payment assistance but when I filed using TurboTax it only asked if I had bought a house.
This is my question as well. Does anybody know?
I searched the site some more and found this…
http://www.federalhousingtaxcredit.com/faq.php#14
So it depends on what kind of program you used. I’m 95% sure this disqualified me. Best of luck to you though!
If you have taken the $7,500.00, can a person change there mind and give it all back? Or can you payback more than the $500.00 and pay it back early.
Just file an ammended return without taking the credit. Talk to someone with experience with taxes.
Thanks Alex
I bought a house that closed Jan 16th 09. I already filed my taxes, and took advantage of the $7500.00. My question is, since my home did not close until Jan 09, and I filed my taxes before the bill was signed, do I still have to pay it back? Also will it bump up to $8000.00?
Hi everyone –
Thought you might like to know that the IRS has updated Form 5405, which applies to both the $7500 and $8000 tax credits. Reading it will answer many of the questions posted on this forum:
http://www.irs.gov/pub/irs-pdf/f5405.pdf
Can anyone tell me the answer to this question. I bought my first home from my parents…it wasnt a gift and I paid the full asking price, so do I still qualify for this credit?
Cher – unfortunately, you cannot claim the credit if you purchased from a close relative (i.e. parents) even if it was the full asking price or FMV. Sorry.
I closed on my home in July 2008 with my fiance. I sold a home last year, however she has never owned a home. We were married in September 2008 and filling jointly this year. My question is if we purchased the home in June 2008 when we were unmarried, do we qualify for the credit?
I had a similar question.
Me and my fiance were going to buy a house together in juky 08. I decided not to put my name on the home so she would be able to get the first time homebuyers loan. We got married in aug 08 and guess what. The irs says she or we cannot claim the credit.
If anyone knows anything to the contrary please let me know.