Homebuyer credit deadline approaching

April 13, 2010

By Staff

The deadline to apply for the First-Time Homebuyer Credit is quickly approaching.

The Internal Revenue Service reminds potential homebuyers to qualify for the credit, they must have a binding contract to purchase a home by April 30 and must close on that home by June 30.

The First-Time Homebuyer Credit provides up to $8,000 for taxpayers buying a new home, if it is their first home or if they have not owned a home in the three years before the date of purchase.

Legislation in 2009 expanded the credit to include longtime residents who purchase a new main home after Nov. 6, 2009. To qualify for this version of the credit, a maximum of $6,500, eligible taxpayers must show that they owned and lived in their old home for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home.

Taxpayers claiming a homebuyer credit must file a paper return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, with additional documents to verify the purchase.

Although these taxpayers cannot file electronically, they can use IRS Free File or other tax-preparation software to prepare the return, which they can then print and mail to the IRS, along with required documentation.

For more information about the First-Time Homebuyer Tax Credit and the documentation requirements, go to here.

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