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Category: Federal

Do I need to repay the First-Time Homebuyer's credit I received?

Homeowners who purchased their home in 2008 and received the First-time Homebuyer’s credit of $7,500 on a 15 year repayment plan, are in year 4. Please remember to complete form 5405 with to add the repayment to your tax return.

Homeowners who purchased their home in 2009 and received the First-time Homebuyer’s credit of $8,000 have completed their 36 month, main-home, ownership requirements during 2012. If you sold or otherwise disposed of your home after the 36 month minimum ownership requirements, you are not required to repay any portion of the credit.

Homeowners who purchased their home in 2010 through 2011 and received the First-time Homebuyer’s credit of $8,000 must complete the 36 month, main-home, ownership requirement to avoid repayment of any or all of the credit received. Remember to complete form 5405 with to add the repayment to your tax return.

Note: Special Benefits for Members of the Military

In many cases, the First Time Homebuyer Repayment (or recapture) requirement is waived for members of the Uniformed Services, members of the Foreign Service and employees of the Intelligence Community.

This particular relief applies where a home is sold or stops being the taxpayer's principal residence after December 31, 2008, in connection with government orders received by the taxpayer (or the taxpayer's spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty, according to the IRS, is any period of extended duty while serving at a place of duty at least fifty (50) miles away from the taxpayer's principal residence (whether inside or outside the United States) or while residing under government orders in government quarters. This is further defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.