|
New Homebuyer Credit - Claim It:
English
|
Spanish
New
Homebuyer Credit – Military:
English
For
these and other videos:
YouTube/IRSVideos
IR-2010-6, Jan. 15, 2010
WASHINGTON - The Internal Revenue Service today released the new form that
eligible homebuyers need to claim the first-time homebuyer credit this tax
season and announced processing of those tax returns will begin in mid-February.
The IRS also announced new documentation requirements to deter fraud related to
the first-time homebuyer credit.
The new form and instructions follow major changes in November to the
homebuyer credit by the Worker, Homeownership, and Business Assistance Act of
2009. The new law extended the credit to a broader range of home purchasers and
added new documentation requirements to deter fraud and ensure taxpayers
properly claim the credit.
With the release of Form 5405,
First-Time Homebuyer Credit and Repayment of the Credit, and the related instructions, eligible homebuyers can now
start to file their 2009 tax returns. Taxpayers claiming the homebuyer credit
must file a paper tax return because of the added documentation
requirements.
The IRS expects to start processing 2009 tax returns claiming the homebuyer
credit in mid-February after it completes the updating and testing of systems to
meet the law’s new requirements. The updates allow the IRS to put in place
critical systemic checks to deter fraud related to the homebuyer credit.
Some of these early taxpayers claiming the homebuyer credit may see tax
refunds take an additional two to three weeks.
In addition to filling out a Form 5405, all eligible homebuyers must include
with their 2009 tax returns one of the following documents in order to receive
the credit:
- A copy of the settlement statement showing all parties' names and
signatures, property address, sales price, and date of purchase. Normally, this
is the properly executed Form HUD-1, Settlement Statement.
- For mobile home purchasers who are unable to get a settlement statement, a
copy of the executed retail sales contract showing all parties' names and
signatures, property address, purchase price and date of purchase.
- For a newly constructed home where a settlement statement is not available,
a copy of the certificate of occupancy showing the owner’s name, property
address and date of the certificate.
In addition, the new law allows a long-time resident of the same main home to
claim the homebuyer credit if they purchase a new principal residence. 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. The IRS has stepped up compliance checks involving the
homebuyer credit, and it encouraged homebuyers claiming this part of the credit
to avoid refund delays by attaching documentation covering the
five-consecutive-year period:
- Form 1098, Mortgage Interest Statement, or substitute mortgage interest
statements,
- Property tax records or
- Homeowner’s insurance records.
The IRS also reminded homebuyers that the new documentation requirements mean
that taxpayers claiming the credit cannot file electronically and must file
paper returns. Taxpayers can still use IRS Free File to prepare their
returns, but the returns must be printed out and sent to the IRS, along with all
required documentation.
Normally, it takes about four to eight weeks to get a refund claimed on a
complete and accurate paper return where all required documents are attached.
For those homebuyers filing early, the IRS expects the first refunds based on
the homebuyer credit will be issued toward the end of March.
The IRS encourages taxpayers to use direct deposit to speed their refund. In
addition, taxpayers can use Where's My Refund? on
IRS.gov to track the status of their refund.
More details on claiming the credit can be found in the instructions to Form
5405, as well as on the First-Time Homebuyer Credit
page on IRS.gov.
Subscribe to
IRS Newswire
|
