1st time homebuyers won’t have to wait for tax credit

First-time homebuyers who qualify for up to $8,000 in new tax credits don’t have to wait until 2010 to get their money.

The Internal Revenue Service says that buyers can claim the credit when filing their taxes this year, by April 15.

Already filed your taxes? You can still get the credit this year, too, by filing an amended return.

The other option is waiting to claim the credit when filing 2009 tax returns, by April 15, 2010.

The tax credit, which is part of the federal stimulus package, provides up to 10 percent of a home’s purchase price (with a maximum of $8,000). Purchases must be between Jan. 1 and Dec. 1. Buyers who haven’t owned a home in the past three years would qualify, too.

The tax credit is capped at $4,000 for married people filing separately, and the amounts are less for people whose adjusted gross income is over $75,000, or $150,000 for joint filers.

People who already filed federal income tax returns this year can still get the homebuyer tax credit early, if they purchased a home since Jan. 1. They would need to file a 1040X to amend their tax returns, reflecting the new tax credit.

Some people may have bought a home after Jan. 1, but before the new tax credit was adopted last week. If they’ve already filed their taxes, they may have claimed the old credit. They, too, could file an amended 1040X, to get the new credit this year.

An IRS spokesman says it’s best to hold off on filing amended returns until after you receive your expected tax refund.

The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit, on www.IRS.gov. The instructions to the revised Form 5405 provide additional information on who can (or can’t) claim the credit, income limitations and repayment of the credit.

“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit,” said IRS Commissioner Doug Shulman in a statement. “This important change gives qualifying homebuyers cash they do not have to pay back.”

First-time homebuyers who purchased between April 8, 2008, and Dec. 31, 2008, would qualify for the previous tax credit of $7,500, which has to be repaid over 15 years.

The new tax credit does not have to be repaid if the recipient stays in the home for 36 months after purchase

 

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