If you bought your first home between April 8, 2008, and May 1, 2010, you can take advantage of the tax benefit for first-time homebuyers. This benefit comes in the form of a credit that, depending on when you bought your home, may not need to be paid back. You can claim this credit so long as the home you bought was your primary residence. If you did not claim this benefit in your 2008, 2009, 2010 or 2011 tax return, you can do so by submitting an amended tax return for the qualifying purchase year.
Homes Bought in 2008
Through the Housing and Economic Recovery Act of 2008, first-time homebuyers who purchased their homes between April 8, 2008, and Jan. 1, 2009, were able to claim a maximum $7,500 credit or 10 percent of the purchase price, whichever is less, on their 2008 tax return. If you claimed this credit, you must pay it back within 15 years as an additional tax on each subsequent year’s tax return. The unpaid balance does not earn any interest during the repayment period so it is basically a 15-year, interest-free loan. If you no longer use the house you purchased as your main residence, you will have to pay the credit back in full in the tax return directly following when you stopped using the house as your main home.
Homes Bought in 2009 and 2010
The maximum first-time homebuyer credit went up to $8,000 for homes purchased after Jan. 1, 2009, but before May 1, 2010, and closed on by July 1, 2010. If 10 percent of the value of the house is less than $8,000, you can only claim the smaller of the two figures. Unlike the credit for 2008, this credit does not have to be paid back. Long-time homeowners who purchase a new home between Nov. 7, 2009. and May 1, 2010. and make the new home their permanent residence can also claim a first-time homebuyer tax credit. The latter category can only claim up to $6,500, which does not have to be repaid.
Homes Bought in 2011
First-time homebuyers who bought their homes after May 1, 2010, through April 30, 2011, cannot claim the first-time homebuyer credit unless they are in the military, foreign service or employees of the intelligence community. If you belong in any of those groups, you can claim a credit up to $8,000 that does not have to be repaid.
Exception for Military Members
Members of the uniformed services, Foreign Service or intelligence community who served on official extended duty abroad for at least 90 days between Dec. 31, 2008, and May 1, 2010, are the only ones who would qualify for the extended first-time homebuyer tax benefit. For the home to qualify, it must have been bought by April 30, 2011, and closed on by June 30, 2011. It must be the primary residence. If you and your home meet all of these requirements, you can claim the benefit on your 2011 tax return.
- IRS.gov: First-Time Homebuyer Credit
- IRS.gov: First-Time Homebuyer Credit Questions and Answers: Homes Purchased in 2008
- IRS.gov: First-Time Homebuyer Credit Questions and Answers: Basic Information
- IRS.gov: First-Time Homebuyer Credit Questions and Answers: Repaying the Credit
- IRS.gov: Deadline for Homebuyer Credit Purchases Nears for Eligible Members of the Military
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