Everything you need to know about the $8,000 Federal Tax-Credit
Over the last few months I have had an enormous amount of questions come my way on
the new 2009 First Time Home Buyers Tax Credit. Please keep in mind that I am not a
Tax Professional and if you have specific questions regarding your own situation you
should consult your adviser or contact me and I will recommend one.
Here are the basics about the 2009 First Time Home Buyers Tax Credit:
• The credit is available for first home buyers that purchase a home between
January 1, 2009 – December 1, 2009. (recently extended to June 30, 2010)
• A first time home buyer is defined as someone who has not owned a home in the
last three years
• Single taxpayers with incomes up to $75,000 and married couples with incomes up
to $150,000 qualify for the full tax credit
• You cannot purchase the home from a related party like a spouse, direct
ancestor, or direct lineal descent (child or grandchild); however, you can still qualify for
the credit if you purchase a property from siblings, nephews, nieces, and others
• The credit amounts to 10% of the purchase price of the home not to exceed
$8,000
• The tax credit does not need to be paid back if you continue living in the home as
your primary residence for three years without selling it
COMMON QUESTIONS AND ANSWERS TO THE 2009 FTHB TAX CREDIT
Once I have closed on my home and I am ready to file for my tax credit how do I get
started?
You will need to fill out tax form 5405 at your local CPA/Tax Preparer office or do it
yourself or go online at www.irs.gov. There on the form you will need to fill in the date of
closing and new address along with your other tax information. Once the form is
completed it can be filed with the IRS.
Do I really get $8,000 in my pocket from the IRS?
Yes, it is an actual $8,000
If I am already getting a tax refund back do I get the $8,000 in addition to this?
Yes, the tax credit is in addition to your normal refund
If I have not paid $8,000 in taxes can I still get the tax credit?
Yes you are still entitled to the full tax credit.
Can I file for my tax credit before I close on my home so I can use the money for my down
payment?
No. For two reasons: (1) It takes anywhere from 8-12 weeks to get the money back from
the IRS and (2) The 5405 requires you to put the closing date of when you closed on
your home. Since you have no ownership interest in the property you are purchasing
yet, then you cannot file for the credit.
Are mobile homes eligible for the Home Buyers Tax Credit?
Yes. The guidelines state that the following types of properties are eligible: House boat,
house trailer, cooperative apartment, condominium, or other type of residence. It has to
be the one you are occupied in most of the time. No second home or vacation
properties.
Can I still file in 2008 for my tax credit and get my money this year?
Yes, you can file the 5405 anytime up until December 1, 2009 and still get the money
this tax year. If you have extended your taxes for 2008 and you have closed on your
home you can just attached the 5405 form to the rest of your tax return.
Do both spouses have to be first time home buyers to receive the credit?
Yes. However, if they are married filing separate they will split the return on the credit.
Can the tax credit be split amount those who are buying the home if they are not
married?
Yes they can split it.
If I have any other questions or would like more information on the tax credit where can I
get it?
You can go online to IRS.gov or click here for form 5405.
the new 2009 First Time Home Buyers Tax Credit. Please keep in mind that I am not a
Tax Professional and if you have specific questions regarding your own situation you
should consult your adviser or contact me and I will recommend one.
Here are the basics about the 2009 First Time Home Buyers Tax Credit:
• The credit is available for first home buyers that purchase a home between
January 1, 2009 – December 1, 2009. (recently extended to June 30, 2010)
• A first time home buyer is defined as someone who has not owned a home in the
last three years
• Single taxpayers with incomes up to $75,000 and married couples with incomes up
to $150,000 qualify for the full tax credit
• You cannot purchase the home from a related party like a spouse, direct
ancestor, or direct lineal descent (child or grandchild); however, you can still qualify for
the credit if you purchase a property from siblings, nephews, nieces, and others
• The credit amounts to 10% of the purchase price of the home not to exceed
$8,000
• The tax credit does not need to be paid back if you continue living in the home as
your primary residence for three years without selling it
COMMON QUESTIONS AND ANSWERS TO THE 2009 FTHB TAX CREDIT
Once I have closed on my home and I am ready to file for my tax credit how do I get
started?
You will need to fill out tax form 5405 at your local CPA/Tax Preparer office or do it
yourself or go online at www.irs.gov. There on the form you will need to fill in the date of
closing and new address along with your other tax information. Once the form is
completed it can be filed with the IRS.
Do I really get $8,000 in my pocket from the IRS?
Yes, it is an actual $8,000
If I am already getting a tax refund back do I get the $8,000 in addition to this?
Yes, the tax credit is in addition to your normal refund
If I have not paid $8,000 in taxes can I still get the tax credit?
Yes you are still entitled to the full tax credit.
Can I file for my tax credit before I close on my home so I can use the money for my down
payment?
No. For two reasons: (1) It takes anywhere from 8-12 weeks to get the money back from
the IRS and (2) The 5405 requires you to put the closing date of when you closed on
your home. Since you have no ownership interest in the property you are purchasing
yet, then you cannot file for the credit.
Are mobile homes eligible for the Home Buyers Tax Credit?
Yes. The guidelines state that the following types of properties are eligible: House boat,
house trailer, cooperative apartment, condominium, or other type of residence. It has to
be the one you are occupied in most of the time. No second home or vacation
properties.
Can I still file in 2008 for my tax credit and get my money this year?
Yes, you can file the 5405 anytime up until December 1, 2009 and still get the money
this tax year. If you have extended your taxes for 2008 and you have closed on your
home you can just attached the 5405 form to the rest of your tax return.
Do both spouses have to be first time home buyers to receive the credit?
Yes. However, if they are married filing separate they will split the return on the credit.
Can the tax credit be split amount those who are buying the home if they are not
married?
Yes they can split it.
If I have any other questions or would like more information on the tax credit where can I
get it?
You can go online to IRS.gov or click here for form 5405.
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Sanford Branch
909B Main Street
Waterboro, Maine 04087
(207) 850-1007
(877) 440-2739
909B Main Street
Waterboro, Maine 04087
(207) 850-1007
(877) 440-2739
