About 950,000 homebuyers out of an estimated 1.8 million Americans will have to repay the homebuyers tax credit they recieved. The confusion comes because homebuyers were eligible for two different credits, depending on when their homes were purchased.
The IRS Inspector General released a report on Thursday stating that as many as 73,000 claims did so errouneously and will have to pay it back.These particular homeowners never actually qualified for the refund. Instead, they received an earlier credit that allowed those who bought properties during 2008 to deduct up to 10% of the home's purchase price or $7,500, whichever was less. The fine print, however, said that this credit was actually a no-interest loan that had to be paid back to the government within 15 years.
It wasn't until February 2009, when Congress first voted to extend the stimulus benefit, that it was changed to a refund. Initially to apply for this credit, homeowners must have made their purchase between Jan. 1, 2009 and Nov. 30, 2009. However, these dates were extended several times through separate legislation and currently, homebuyers have until Sept. 30 to close on their purchased properties.
Hopefully these homebuyers understood the fine print but I suspect many of them did not and so we are going to have some issues on our hands in getting these folks to pay it back. Most of them are first time homebuyers and had already scrimped and saved for the down payment, I do not believe alot of them will be able to afford to pay it back unless the IRS does something to help them out.
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