When the first-time home buyer tax credit was enacted in 2008, in the aftermath of the housing crisis, it was structured as a no-interest loan and taxpayers who used it had to pay it back over time (in annual installments through your tax return). In 2009, the credit was amended to eliminate the pay-back requirement.
To help 2008 and other borrowers who have to pay back the proceeds of that credit, the IRS today released a “tool” to help make that process easier, the First-Time Homebuyer Credit Lookup Tool.
In essence, the tool simplifies the gathering of information you need to include the proper pay-back amount in your federal tax filing:
- Balance of your first-time homebuyer credit
- Amount paid back to date
- Total amount of the credit received
- Annual installment repayment amount
Prior to release of this tool, taxpayers had to gather this information themselves for reporting on IRS Form 5405. Now it’s available through the IRS by punching in your Social Security number, date of birth, and some other identifying information.
Who else besides 2008 credit users need to pay back their benefit? The IRS says those who used the credit in 2009 or 2010 and then sold their home within three years of purchase. (Under the program, you have to own your primary residence for three years after you take the credit to avoid the pay-back rule.)
You can get more on the rules and the new look-up tool from the IRS.
By Robert Freedman, senior editor, REALTOR® Magazine
What are the chances of getting the first-time home buyer tax credit extended, particularly before its expiration Dec. 1? No one can know that, of course, but what’s clear is that the leadership in Congress wants it extended—and if you have the leadership on board, you’re in a strong position. Yet with health care reform consuming Congress’ attention, even the leadership faces a challenge ensuring the tax credit gets the consideration it deserves.
After sitting down with Linda Goold, NAR’s director of tax policy, and Samuel Whitfield, an NAR legislative representative, I learned the tax credit has really been the economic recovery’s workhorse. The IRS says 1.4 million households have used the credit. What’s more, a number of independent looks at the credit, including one by Economy.com (owned by Moody’s) and Campbell Surveys, estimate that between 350,000 and 400,000 home purchases would not have happened without the credit. NAR has come up with a similar estimate.
Goold and Whitfield say there’s bipartisan support for extension, and NAR is on Capitol Hill daily reminding lawmakers that the clock is running. But it’s coming down to the wire.
By Melissa Dittmann Tracey, Multimedia Producer, REALTOR® Magazine
NAR has unveiled a new TV ad that spotlights the $8,000 first-time homebuyer tax credit. The new ad, “Housewarming,” hit the airwaves this week and is available to view and download at REALTOR.org. The ad spot features Uncle Sam presenting a young couple an $8,000 check in their new home and urges buyers to contact a REALTOR®. State and local associations can use the ads in their local markets.
View a behind the scenes look at the making of the commercial below, and then learn more about NAR’s Public Awareness Campaign.
Is the first-time home buyer tax credit enough to kick-start home sales? Should banks do more to make mortgages available? Recent government action aims to help housing–but are the measures enough?
We put these questions to you. REALTOR® Magazine asked attendees at NAR’s 2009 Midyear Legislative Meetings to share their views on what more the federal government can do to help the sluggish housing industry. Watch the video below and then share your thoughts!