First-Time Homebuyer Tax Credit
2010 was the last year in which the First-Time Homebuyer Tax Credit was available to all taxpayers.
Certain military personnel, members of the Foreign Service, and employees of the intelligence community may qualify to claim the First-Time Homebuyer Credit on their amended 2011 Tax Returns. Find out about the extended Homebuyer Credit for members of the armed forces.
Even if you are not in the military, if you qualified for the Homebuyer Tax Credit in 2010, but you did not claim the credit on your 2010 Tax Return, you may file an amended return in order to claim it.
You can now check your First Time Home Buyer Credit or FTHBC account online. This online tool will help taxpayers to accurately report their FTHBC repayment obligations on their IRS federal tax return. Access the First Time Homebuyer Credit Account Tool - or call 1-800-919-0352 if you need to speak to somebody.
Taxpayers need to enter their Social Security Number, date of birth, and complete address. Taxpayers will be able to check on the original amount of the credit, annual repayment amount, total amount paid (with the most recent account update) and the total balance left to be paid.
Homebuyer Tax Credit Deadlines
The deadline to close on the purchase of a home and still qualify for the First-Time Homebuyer Tax Credit was September 30, 2010. But before you closed the sale, you must have entered into a binding contract before May 1, 2010. If you met both of these deadlines, you may be able to claim the credit on your 2010 Tax Return.
The 2010 Tax Credit for First-Time Homebuyers AND Current Homeowners
If you bought a home in 2010, you will want to know about the First-Time Homebuyer Tax Credit:
Unlike the First-Time Homebuyer Tax Credit from previous years, the 2010 credit need not be repaid as long you own your house for at least three years and it remains your primary residence during that time.
The First-Time Homebuyer Credit will allow taxpayers a maximum credit of up to $8,000.
The full amount of the credit is refundable, which means that you will get it in your tax refund if you owed the IRS less than the amount of the credit.
The credit may be claimed by many current and/or previous homeowners who purchased a new home to be their primary residence.
Claiming the First-Time Homebuyer Tax Credit does not necessarily disqualify you from claiming another credit for homeowners (for example, the Mortgage Interest Credit). You may be able to claim multiple such credits on your home purchase. Learn more about tax deductions and tax credits for homeowners.
Do You Qualify for the First-Time Homebuyer Tax Credit?
Even if the home you purchased this year wasn’t your first, you may still qualify and be able to claim the tax credit. Homebuyers who have not owned a primary residence for three years leading up to the date of purchase qualify for this credit. For married couples, this restriction applies to both spouses.
To qualify for the Homebuyer Tax Credit, you must have entered into a contract to buy your home on or before April 30, 2010 and you must have closed the sale by September 30, 2010.
The amount of the credit begins to phase out at modified adjusted gross incomes of greater than $125,000 for single filers ($225,000 married filing jointly) and phases out completely at $145,000 ($245,000 married filing jointly).
The credit may be claimed only on a primary residence. You may own more than one home, but you must use the newly purchased home as your primary residence in order for it to qualify for the credit.
The credit is refundable, so you may receive it in your tax refund if you owe no tax or if the credit amount is greater than your tax liability.
Special Extension for Members of the Armed Forces: Military personnel who served outside of the U.S. for 90 days or more between Jan. 1, 2009 and May 1, 2010 may qualify for an extension of one year.
Click here for common questions and answers about the First-Time Homebuyer Tax Credit
How to Claim the First-Time Homebuyer Tax Credit
If you purchased a home in 2010, you may claim the credit on your 2010 Tax Return by attaching Form 5405 (efile.com will generate this form for you).
If you purchased a home in 2009, you may file an amendment to your 2009 Tax Return.
If you purchased a home in 2008, you may file an amendment to your 2008 Tax Return.
During your tax preparation on efile.com the online tax preparation software will generate the correct tax form for you and let you print the form along with your tax return.
The Homebuyer Tax Credit for Long-Time Homeowners
If you have previously owned a home for at least 5 consecutive years in the 8-year period which ends on the day you purchase your new home, and used it as your primary residence, you may qualify for a tax credit of up to $6,500. The income phaseouts and other eligibility requirements for this version of the credit are the same as those described above.
First-Time Homebuyer Credit Restrictions
Several restrictions apply to the First-Time Homebuyer Credit for any homes purchased in 2010. In fact, these restrictions apply to all homes purchased after November 6, 2009:
You (or your spouse) must have been at least 18 years old on the purchase date.
You may not be claimed as a dependent on another person's tax return.
The purchase price of your home must not exceed $800,000.
You must attach a properly executed settlement statement to your tax return.
Your application for the credit may be denied due to an error in math, without the IRS having to conduct a full audit. (Using efile.com is a great way to eliminate math errors.)
If You Purchased a Home before 2010
Taxpayers who purchased their first homes between April 8, 2008 and January 1, 2009 may qualify for a different tax credit of up to $7,500, to be paid back interest-free in 15 equal yearly installments. If you didn’t claim this credit on your 2008 Tax Return but think you might qualify for it, you can file an amendment. You can also file an amendment if you purchased a home in early 2009 and claimed the credit on your 2008 return but now want to take advantage of the 2009 credit instead. Remember that if you purchased a home after Nov. 6, 2009, you are subject to the newer restrictions outlined above.
Can I efile if I Claim the First-Time Homebuyer Credit?
Yes, but because of the documentation requirements, the IRS will not accept electronically filed (efiled) 2010 Tax Returns that claim the Homebuyer Credit. However, you may still take advantage of the efile.com tax software to easily prepare your tax return and print it for no additional charge. You can then mail the paper copy to the IRS. Be sure to include Form 5405, First-Time Homebuyer Credit, but don't worry; the efile.com tax software will select the correct form for you.
If your new home was purchased after November 6, 2009, you must also include a paper copy of the settlement statement with your tax return. This is generally a Form HUD-1 which shows all parties' names and signatures, the address of the property, the final sales price, and the official date of purchase.
If your new home was newly constructed and a settlement statement is not available, you must include a copy of the certificate of occupancy showing the owner’s name, the address of the property, and the certificate's date.
If your new home is a mobile home and a settlement statement is not available, you must include a copy of the retail sales contract showing all parties' names and signatures, the current address of the property, the purchase price, and the date of purchase.
If you are a long-time homeowner you must prove that you occupied a prior home for at least a 5 year period in the last 8 years. The IRS recommends that you include with your return at least one of the following: property tax records, homeowner's insurance records, and/or a Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements.
Documentation Requirements for the First-Time Homebuyer Credit
The IRS requires that those new homebuyers who purchased their home after November 6, 2009 attach a copy of their settlement statement to their 2010 Tax Return or 2009 Amendment. Normally, the signatures of both the buyer and seller are required, but the IRS will accept settlement statements that are in compliance with local laws (e.g. in cases where there is not a signature line for both parties). Nonetheless, the IRS encourages homebuyers to sign their settlement statements, even if there is no seller's signature or if there are no lines for signatures at all.
Find out more about the First-Time Homebuyer Tax Credit
See what other tax credits and tax deductions you may qualify for.