D.C. First-Time Homebuyer 5K Tax Credit

D.C. First-Time Homebuyer 5K Tax Credit

UPDATE 1-2-13: BIDEN-MCCONNELL DEAL PASSED

Update 12-10-12

Many of our clients ask about the DC First Time Homebuyer 5K Tax Credit and we like to keep them in the loop. The Isaacs Team checks on this issue weekly and here's what we have to report at this stage:

It is our understanding, after speaking with various sources that:

• The DC First Time Homebuyer 5K Tax Credit has not yet been renewed for 2012;
• The D.C. First-Time Homebuyer 5K Tax Credit is part of a larger negotiation tied in with the so-called "fiscal cliff";
• The Senate Finance Committee passed a package without the credit;
• The House has not produced a separate package;
• The D.C. First-Time Homebuyer 5K Tax Credit is part and parcel of the negotiation on 10-12 separate items and it is not likely to be resolved prior to resolution on the entire issue.

We'll keep you posted.

DC First Time Homebuyer 5K Tax Credit

*For homes purchased on or before December 31st of each year the credit is renewed.

Thanks to The Taxpayer Relief Act of 1997, this federal tax credit is available to first-time homebuyers in the District of Columbia.

The credit is the smaller of:

1. $5,000. if single, married filing jointly, head-of-household, or qualifying widow(er) ($2,500, if married filing separately) or
2. The purchase price of the home.

In general, DC real estate homebuyers may claim the tax credit if they purchased a primary residence during the tax year in the District of Columbia, and you (and spouse, if married) did not own any other primary residence in the District of Columbia during the 1-year period ending on the date of purchase.

Income restrictions and other qualifications may apply. You must file form 8859 and the federal form 1040 to claim this credit.

How to Claim the DC First Time Homebuyer 5K Tax Credit

Download Form 8859 for First-Time Homebuyer Credit Tax to file in addition to Form 1040.