Tuesday, March 31, 2009

IRS Provides Filing Guidance on First Time Homebuyer Tax Credit

The IRS has released additional information to help homebuyers understand the ways they can file to receive the homebuyer credit. It is important for taxpayers to know that they must complete the purchase and close or take up residence in the case of new construction in order to be eligible to file for the credit. Here are the four main options listed by the IRS: 1) File an extension; 2) File now, amend later; 3) Amend the 2008 tax return; or 4) Claim the credit in 2009 rather than 2008.
There are a number of entities working on ways to advance money to be used for down payment in anticipation of receiving the credit. NAR is working to provide guidance on these options and how they might work. However, there is no legal way to receive the credit itself from the IRS prior to closing since closing on the purchase is a prerequisite to eligibility for the credit. Click here for IRS Release outlining options in more detail.

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