It was announced recently that the closing deadline to be eligible for the $8,000 tax credit was extended from June 30, 2010 to September 2010. This will be a big benefit for people with new construction who are having trouble getting the house completed in time.
Originally, first time home buyers were eligible for an $8,000 credit for homes purchased before April 30, 2010 with a closing deadline of June 30, 2010. Now the closing deadline has been extended to September 30, 2010. Please note that to qualify for this credit, a purchase contract must have been entered into buy April 30, 2010 – that date has not been changed.
This change came about because of bill H.R 5623 – Homebuyers Assistance and Improvement Act of 2010. It was introduced and approved by the House (409-5) to extend the home buyer credit for new and existing home buyers
An $8,000 credit is available for first time home buyers. Up to $6,500 is available for qualify current home owners.
How to claim for the home buyer tax credit
This information can be found on the IRS website.
You can claim this credit on your 2009 or 2010 return.
To claim on your 2009 return, the tax return must be file a paper return and attach Form 5405. You must also include a properly executed copy of a settlement statement used to complete the purchase.
Purchasers of conventional homes
Include a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties’ names, property address, sales price and date of purchase.
Purchasers of mobile homes
If you are unable to get a settlement statement then include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price and date of purchase.
Purchasers of newly constructed homes
If a a settlement statement is not available, then include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
Note Regarding Signatures
While the Form 5405 instructions indicate that a properly executed settlement statement should show the signatures of all parties, the IRS recognizes that the elements of the settlement document, often a Form HUD-1, may vary from jurisdiction to jurisdiction and may not reflect the signatures of the buyer and seller. The settlement statement that must be attached to the return is considered to be properly executed if it is complete and valid according to local law. In locations where signatures are not required the IRS encourages the buyer to sign the settlement statement prior to attaching it to the tax return even in cases where the settlement form does not include a signature line.
Long-Time Residents
The November 2009 legislation extends the credit to long-time residents of the same main home if they purchase a new main home. To qualify, eligible taxpayers must show that they lived in their old homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. For long-time residents claiming the credit, the IRS recommends attaching, in addition to the documents described above, any of the following documentation of the five-consecutive-year period:
- Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
- Property tax records or
- Homeowner’s insurance records.
General Information
Home buyers who purchased a home in 2008, 2009 or 2010 may be able to take advantage of the first-time homebuyer credit. The credit:
- Applies only to homes used as a taxpayer’s principal residence.
- Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.
- Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.