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First Time Homebuyer Credit

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TAX FORM 5405

This lens is all about the First Time Homebuyer Credit for 8,000. This credit is the newest signed into legislation for the 2009 and 2010 tax year. However, if you missed out on the 2008 homebuyer credit make sure you amend your 2008 tax return if you want to claim it. The first homebuyer credit came out in 2008 and has continued to be a very popular credit. The Obama Administration has extended the credit and also raised the amount of the credit in light of the current economic climate. See below to find out if you qualify for the First Time Homebuyer Credit and also to download a copy of tax form 5405.

New Table of Contents

  1. Do you qualify for the First Time Homebuyer Credit?
  2. Get the First Time Homebuyer Tax Form
  3. If you are not sure

Do you qualify for the First Time Homebuyer Credit?

If you purchased a home after January 1, 2009 you are eligible for the new credit.

If you purchased your home before January 1, 2009 then you may qualify for the old 2008 Credit for 7,500. Below are criteria for the new 8,000 First Time Homebuyer Credit:
  • The $8,000 First Time Homebuyer Tax Credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
  • The First Time Homebuyer Tax Credit does not have to be repaid unless the home is sold or ceases to be used as the buyer's principal residence within three years after the initial purchase.
  • The First Time Homebuyer Tax Credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.
  • The First Time Homebuyr Tax Credit applies only to homes priced at $800,000 or less.
  • The First Time Homebuyer Tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
  • For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly to receive the full First Time Homebuyer Credit.
  • For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

    The homebuyer credit for 2008 was essentially an interest free loan that had to be paid back over a 15 year period. The new credit is essentially free money, as long as the above stipulations are adhered to, although there is no such thing as a free lunch. Well I hope this page helps and good luck on your new home purchase. It is always better to buy than rent because your payments are going towards what has historically been an appreciating asset. Congratulations!

Get the First Time Homebuyer Tax Form

Tax Form 5405

The First Time Homebuyer Credit
This link will take you to the IRS page where the information about the new home credit is contained. Note that a new form 5405 will be coming out at the end of December. For the time being the IRS has posted the old 5405 tax form for claiming the credit in 2008. To claim the credit in 2009 or 2010 you must wait for the new form.

If you are not sure

Remember that each situation is different and no matter how well written tax advice may be, this page is for informational purposes only and not to be taken as professional advice. You should always consult a tax professional about your specific situation.

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Taxmandue

Hi and thanks for visiting my lens! My name is Charlie and I've been preparing individual and corporate taxes for over three years now.

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