There seems to be a lot of chatter about people receiving their First-Time of Long-Time Homeowner Tax Credit before they close on a home, before they file their taxes, after they file their taxes, etc. I spent some time researching the information and I can only find the information below. If you have received your Homebuyer Tax Credit any other way other than including it in your taxes for 2009 or amending your 2009 taxes, please submit the information below. As tax season approaches, it is a great time to share questions and answers.
If you are eligible for the homebuyer credit and are claming the creidt on your tax return, there are certain requirements. You must use Form 1040 to claim the credit (reported on line 67 of the 2009 return). You cannot use Form 1040-EZ or 1040-A. If you have already filed your tax return, you can amend it using Form 1040-X. If you are a first time buyer, you must attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. Also, you must attach documentation showing the purchase of a home between the applicable dates. And, you must file a paper, not electronic, return.
The documentation required as proof to show you bought a new home in 2009 or 2010 is as follows:
If you claim the credit on a 2009 (or later) return, you must attach a copy of your settlement statement. For most homebuyers, this will be a properly executed Form HUD-1, Settlement Statement (U.S. Department of Housing and Urban Development) that includes:
- Names and signatures (if available) of all parties involved,
- Property address,
- Purchase price, and
- Date of purchase
If you are a long-time resident of the same main home and you buy a new home, the law may allow you to claim the homebuyer credit. To qualify, you must have lived in the same main home for at least a five-consecutive-year period during the eight-year period ending on the purchase date of the new home.
You can avoid refund delays by attaching documentation, such as the following, covering the five-consecutive-year period:
- Forms 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
- Property tax records, or
- Homeowner’s insurance records
If you are not closing before tax day, you do have the option to either inquire about an extension for filing your taxes and then include your homebuyer tax credit information when you close or you can e-file now and amend your 2009 tax return once you close and can provide the proper proof of purchase. Before you decide to use that approach, consider that amended returns cannot be filed electronically. Routine processing of amended returns generally takes 8 to 12 weeks. Recently, however, because of higher than normal amended return volumes, it is now taking 12 to 16 weeks to process these returns.
For more questions and answers about the Homebuyer Tax Credit, go to http://www.irs.gov/newsroom/article/0,,id=218698,00.html.
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