The First Time Homebuyer Credit is a credit which reduced a
taxpayer's tax bill (or increased his or her refund) if he or
she purchased a new home between certain time periods. This credit was
one of the incentives used by Congress to try to help the real estate
market by giving an incentive to certain individuals to purchase a home.
Were you aware that you may have a repayment obligation for receiving the First Time Homebuyer Credit?
If you claimed the credit for a house you purchased in 2008 (applicable
for homes purchased after April 8, 2008 and before January 1, 2009),
the credit was really a 0% loan and was to be repaid in 15 equal annual
installments beginning in 2010 as an additional "tax" on the tax return
(shown on line 59b of the 1040). The credit was extended for a few
additional years and if you took the credit during 2009 or 2010 (and
even for part of 2011 for military personnel) you do not have a
repayment obligation unless
the home you purchased is no longer considered your home (meaning that
you sold it, it was destroyed or it was converted into a business or
rental property) within three years from the date of purchase.
The IRS has a new tool on
its website that allows individuals who received the First Time
Homebuyer Credit to determine his or her repayment obligation. In order
to access the information you will need your Social Security Number,
date of birth and complete address. The website will show the original
amount of the credit, the annual repayment amounts, total amount paid
and the total balance left to be paid. The IRS will no longer be
mailing reminder letters to individuals that have to repay the credit
and this will be the only way to access the information.