Update: The $8,000 First Time Home Buyer Tax Credit Extended the deadline until June 30, 2010. In addition, it will now include a $6,500 Home Buyer Tax Credit for Existing Homeowners.
We finally have an enhanced first time home buyer tax credit! The President signed the Economic Stimulus Bill Tuesday, which includes a $8,000 tax credit for first time home buyers.
$8,000 First Time Home Buyer Tax Credit
Even though the $15,000 Home Buyer Tax Credit was proposed, it was cut back in negotiations.
The good news for home buyers, is that unlike last year’s $7,500 First Time Home Buyer Tax Credit, the 2009 home buyer tax credit doesn’t need to be paid back!
Here is additional information on the credit:
- It applies to homes purchased January 1, 2009 through November 30, 2009.
- You must keep the home for three years.
- The credit is for $8,000 or 10% of the home’s value, whichever is less.
- The credit is refundable.
- You cannot have owned a home for the past 3 years.
- It phases out for incomes between $75,000 to $95,000 for single and $150,000 to $170,000 for couples.
How to File for Your Home Buyer Tax Credit
A reader, Yvette, asked the following question:
Since the stimulus package was signed, when and where can I find the details for the $8,000 home buyer tax credit? We are in escrow now hoping to close by the end of this month and are holding off on filing our taxes because we would like to file the house for 2008. Also, do the tax software packages get updated with that info? Or that box for a tax credit?
In the original bill, you could elect to treat the $7,500 loan for a 2009 purchase on your 2008 taxes. According to the new 2009 bill, you can still make the election on your 2008 taxes. If you do this, you still will not have to repay it, if your purchase occurs during 2009.
I checked my version of TaxCut yesterday, but haven’t seen any updates yet. I also haven’t seen any memos from the IRS yet.
In the past, in this type of situation the IRS usually updates the affected forms (Form 5405 is where you claim the credit), and the tax software packages follow soon after. However, we’ll have to wait to see how they decide to handle the increase to $8,000.
Otherwise, if you are really anxious, you could just claim the $7,500 on your taxes, and make an amendment for the other $500 once the forms are available.
Update: For instructions on how to get your tax credit, including the form to file with your taxes and what documentation you need to include, see How to Claim Your Home Buyer Tax Credit.
You can read the full text of the economic stimulus bill, called the “American Recovery and Reinvestment Act of 2009” on the White House’s site. The $8,000 home buyer tax credit is in section 1006 in the first and second files.
In addition, the President is planning more relief for homeowners and the housing market in the “Making Home Affordable Program.”
This is only good news for people interested in stealing money from their friends and neighbors, and many future generations.
Welfare has taken another step toward full blown Socialism. You can now get welfare to buy a house.
Oh, and it certainly shouldn’t apply to people with incomes over $75k right? It wouldn’t make sense that the folks paying the MOST receive something back. It should ONLY be for the folks who pay the least tax!
EVERYONE SHOULD OWN A HOME! That’s what the government and bankers want us all to believe.
What a bunch of crap!
You’re a douchebag
So, government is punishing those who did their bit by buying a home in 2008 and rewarding those who waited on sidelines as they will not only benefit from dropped home prices but will get a cool dose of $8,000 on top of it that does not have to be paid back. I say why are the first-time home buyers of 2008 being discrminated? Or rather why discriminate any kind of home buyer?
Moreover, why anyone should get any kind of money from government for buying a home? No one should be given any kind of incentive to buy a home from government. Let thos incentives come from home builders or sellers who were too busy flipping homes or reaping undeserving profits. Let the housing take care of itself. Those who say that it needs to be revived immediately have vested interests in doing so.
Before anyone jumps the gun, I was a first-time home buyer in 2008 and will qualify for $7,500 tax credit. Now, I will do anything that I can to ensure that I do not pay any bit of money back. I have been an honest tax-payer all my life, but this is too much.
Though it does not matter much, we all are going to be paying for this free money either by paying higher taxes or by suffering losses through detoriating economy or may be both.
America has become a land of free money opportunity for a big bunch of shameless, greedy, and undeserving people and unfortualtely, we, common people, cannot do much about it.
Question – if we are purchasing a home as a married couple and one of us is a first time home buyer and the other one is not, do we qualify for the credit at all?
Question: is this credit *up to* $8,000, depending on your income? What I’ve heard is that unless your tax liabilities are greater than $8,000, you won’t be able to claim the full credit amount.
@ Stephen Waits and Sanjeev: if this is “socialism,” we’ve had it for a long time. Or haven’t you noticed that the home mortgage interest deduction is basically a giant subsidy, and one that benefits those buying the biggest, most expensive house the most?
@Max, oh I’ve noticed long ago. It’s ridiculous. Please see: http://en.wikipedia.org/wiki/Moral_hazard
I am a first home buyer but I will still live with my parents and rent this house out before my parents retired in five years. Under this condition, do I still meet the definition under this law that “the home buyer must use the residence as a principal residence for at least three years”?
I’m a 49 year-old working class, staunch, pro-life, small governement conservative (no matter what anyone online might say). I’ve worked hard, invested and saved all my life to try to get ahead, only to see some of the savings washed away by Franks, Dodd, and unethical Wall Street big wigs. All those years I watched lazy, irresponsible people collect welfare from working people. Now it’s my turn. Give me the $8,000. I’ll take it.
We sold our home ten years ago, bought a mobile home, which we own, but not the land. We pay rent on the lot and pay only personal property taxes on the mobile home, just like our autos. Do we qualify for the $8,000 credit?
My husband and I bought a house in 2008, so we were able to take advantage of the $7500 credit which was great. My problem is, we have to repay our $7500 when people who buy in 2009 don’t. I’m ok with the fact that we got $500 less just because we bought our house a little earlier than others, but what I don’t understand is why we are required to repay this credit, yet others are not?
Hey Harvey Swartz, Im in the same situation, Did you get an answer about if you owned a mobile home & payed lot rent, now buying a house do you qualify ? No one seems to know the answer ??????????????????
Harvey, kathy, i have the same question i am in same circumstance.!?????
We are “renting to own” a home right now, does that mean we are not first time home buyers?
I understand some of your frustrations, but that is just how things go sometimes. You can always find something to complain about.
I am 32 years old. I put myself though college (undergrad, masters, phd) and am now a college professor with no home. I have never asked for a handout and have worked extremely hard to get where I am and I am only making in the mid 50’s a year (which is actually pretty good for a college professor starting out). The only way I can afford a home right now is with this tax credit. Without it I am going to stay in my apartment and not gaining equity.
I could be anrgy that I have all of this education and dont make nearly what some people with a high school diploma are making. I could be upset that i didnt get in on the market when people were giving out home loans to anyone and everyone. Im not though. I made my decisions to not buy before and I made my decisions to pursue a costly education with not a lot of return on my investment (because I REALLY like what I do), and I am prepared to live with it. With that being said, I am going to take full advantage of this tax credit and I hope many many others do too. You guys can be pissed that you didnt get what these people are getting and you didn’t get a handout all you want. I am just happy that myself and many others have a chance at getting into a home for the first time…
PLEASE help..how do we keep from paying back this $7500..i under stand the last guys point but come on..most all of us work for what we have and it is not fair to go from paying it back one year to completly giving it away the next..IF ANYONE HAS ANY, ANY IDEAS AT ALL..on how to work around having to pay this $7500 from buying a home in 08..PLEASE let me know. Thank you
Well, if you figure out how to NOT pay back the $7500,let me know! I don’t see any way around it at this point, but I totally agree with you…….why give it away this year but not last year!! What makes a homebuyer in 2009 any more special than a homebuyer in 2008??
Mike & Roni…let me know if you find a way around this…I feel like you..
My mother purchased a mobile home 9 years ago and put it in my name. I now am in the process of building a new home, do I qualify for the tax credit?
@ Will: According to IRS Form 5405, it looks like for married couples, both of you must be first time home buyers to claim the credit.
@ Max: The “up to” part account for the 10% of purchase price. If you only bought a $50,000 home, you would get $5,000. The tax credit is refundable, so you could receive more money than your tax liability.
@ Harvey, Kathy, Corey, Meghan, Tawnya: I’ve done a lot of looking on the mobile home issue for you.
Unfortunately, it looks like mobile homes are still considered a primary residence. Therefore, if you owned one in the last 3 years, I would doubt that you are able to claim the tax credit.
See “Who Can Claim the Credit” section of Form 5405.
It states: “You (and your spouse if married) did not own any other main home during the 3-year period ending on the date of
Main home. Your main home is the one you live in most of the time. It can be a house, houseboat, housetrailer, cooperative apartment, condominium, or other type of
So I’m in the group of individuals that are receiving the 2008 first-time homebuyers credit. When I heard about the 2009 credit I was somewhat aggrevated but stop and think for a minute…before this legislation came out in 2008, how much of a credit were you going to get for being a first-time homebuyer? Ok, how pleased were you with the idea of a $7,500 credit, even if you had to pay it back? Since you can’t change the past, just be satisfied with even getting a credit, I know people that bought their home in 2008 before April 4th, put yourself in their shoes and decide which is better. Better yet, if you don’t want to pay the credit back, don’t allot to take it…
Don’t get me wrong, I’m very much appreciative of my $7500 credit. Because of it, my husband and I were able to get alot done with our house. I don’t even care that other people were given an extra $500, but the point is…….there is absolutly no reason we have to pay back our $7500 while others are exempt. And sure, we could have alloted to not get the credit, but come on, who doesn’t need the money these days?? It still doesn’t make sense that we are required to pay back our credit, no matter how you try to analyze it!!
I’m with you Roni. Ever since I found out that 2009 people don’t have to repay and I do, I feel a little rooked. I was glad to have it as well, and fully understood the terms and conditions entailed(I just happened upon it while doing my taxes, didn’t buy my home because of it)…but we closed on our house 12-30-08! Two days later and I would have qualified for the NON-repayment credit!? So, technically, two days after I ‘borrowed’ the money they were ‘loaning’, they started just ‘giving away’ the money, and flipping us borrowers off and laughing, I suppose. Well….maybe by this January when we have to file and start paying it back the rules will have changed again…in our favor?
I still get your frustrations…because we’re in the same boat…while they discussed inclusions in to the Economic Recovery Act (aka Stimulus Package) they considered a piece that would settle the debts of those people that took this credit, meaning we wouldn’t have to pay it back, along with that, they also discussed a $12,000 tax credit, that would not have to be paid back, for any homebuyer, first-time or not for 2009 home buyers. I was considering upgrading homes if that would have been the case. We need our Republican majority back…