IRS Tax Tip: First-Time Homebuyer Credit Look-up Tool

By
Real Estate Agent with RE/MAX Associates RS - 0019092
 

The IRS no longer mails reminder letters to taxpayers who have to repay the First-Time Homebuyer Credit. To help taxpayers who must repay the credit, the IRS website has a user-friendly look-up tool. Here are four reminders about repaying the credit and using the tool:

Who needs to repay the credit? If you bought a home in 2008 and claimed the First-Time Homebuyer Credit, the credit is similar to a no-interest loan. You normally must repay the credit in 15 equal annual installments. You should have started to repay the credit with your 2010 tax return.

You are usually not required to pay back the credit for a main home you bought after 2008. However, you may have to repay the entire credit if you sold the home or stopped using it as your main home within 36 months from the date of purchase. This rule also applies to homes bought in 2008.

How to use the tool. You can find the First-Time Homebuyer Credit Lookup tool at IRS.gov under the ‘Tools’ menu. You will need your Social Security number, date of birth and complete address to use the tool. If you claimed the credit on a joint return, each spouse should use the tool to get their share of the account information. That’s because the law treats each spouse as having claimed half of the credit for repayment purposes.

What the tool does. The tool provides important account information to help you report the repayment on your tax return. It shows the original amount of the credit, annual repayment amounts, total amount paid and the remaining balance. You can print your account page to share with your tax preparer and to keep for your records.

How to repay the credit.  To repay the First-Time Homebuyer Credit, add the amount you have to repay to any other tax you owe on your federal tax return. This could result in additional tax owed or a reduced refund. You report the repayment on line 59b on Form 1040, U.S. Individual Income Tax Return. If you are repaying the credit because the home stopped being your main home, you must attach Form 5405, Repayment of the First-Time Homebuyer Credit, to your tax return.

 

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Comments (6)

Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in Southern RI and beyond

Christopher, this is a great post because many first time buyers have forgotten about the caveats on that incentive...thanks for sharing.

May 16, 2013 10:08 PM
Ed & Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Good Morning,  Great post and great Info for all,  keep up the good work and good luck with your business,  E

May 16, 2013 10:23 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Christopher, this is good information for homeowners who have to repay the First-Time Homebuyer Credit.

May 16, 2013 10:31 PM
Team Honeycutt
Allen Tate - Concord, NC

This is good information. It is hard to keep up with all of the requirements that are necessary to understand and complete.

Betty

May 17, 2013 01:16 AM
Harrison K. Long
HomeSmart, Evergreen Realty - Irvine, CA
REALTOR , GRI, Broker associate, Attorney

Thanks for this good information about the IRS first-time homebuyer tax credit look up tool.

May 17, 2013 01:37 AM
Bill Reddington
Re/max By The Sea - Destin, FL
Destin Florida Real Estate

Sure it was a good program at the time. Thanks for the info. Will pass it along.

May 18, 2013 12:15 AM