For Tax Years 2008-2010 Only: Claiming the First-Time Homebuyer Tax Credit
If you want to file or amend a return to claim the federal homebuyer credit, you can do so using TurboTax.
The credit was available ONLY for homes purchased in 2008, 2009 and 2010 (with one exception explained below.) The rules changed over the three years, however.
For information on the various rules, please see the helpful First-Time Homebuyer article on the IRS website. It also includes information on the so-called long-time homebuyer credit.
IMPORTANT: If you received the credit and you stop using the home as your principal resident within three years, you could be required to repay some or all of the credit depending on the circumstances. TurboTax will help you determine whether and how much you need to repay.
Some military, federal employees get an extra one year to qualify
Some military service members and certain other federal employees serving outside the country in 2009 and 2010 have an additional year to to qualify for a homebuyer credit. Eligible taxpayers must enter into a binding contract to buy a principal residence on or before April 30, 2011 and close the purchase by June 30, 2011.
For more information see Federal Homebuyer Credit in 2011: Available Only to Certain Members of Armed Services, Foreign Services, Intelligence Community.
Home-purchase documents required by the IRS
- For purchasers of conventional homes, a copy of Form HUD-1, Settlement Statement, or other settlement statement, showing all parties' names and signatures, property address, sales price and date of purchase.
- For purchasers of mobile homes 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.
For long-time homebuyers only:
Eligible taxpayers must show that they lived in their former homes for a five-consecutive-year period during the eight-year period ending on the purchase date of the new home. To claim the credit, long-time residents must attach the documents above. The IRS also recommends attaching any of the following to document the five-consecutive-year period:
- Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
- Property tax records or
- Homeowner’s insurance records.
Regarding the IRS requirement for signatures on settlement documents: While IRS instructions state that a valid home-purchase settlement statement should have the signatures of both the buyer and the seller, the agency recognizes that in some parts of the country, such signatures are not legally required.
Therefore, the IRS will accept a settlement statement, typically a Form Hud-1, if it is complete and valid according to local law. Even if the signature of the buyer isn't required on the settlement form, the IRS encourages buyers to sign the form before attaching it to the tax return. And, if the signature of the seller isn't on the settlement document, the IRS advises that the buyers still sign the document.
Important considerations for single people who buy a home with a co-signer or other single person
If you are single and buy a first-time home as a part owner, you can claim a percentage up to the full amount of the credit, as long as you qualify for the credit.
The IRS says that taxpayers who buy a home together can allocate the credit in any “reasonable” manner, just as long as each person who gets the credit meets the first-time homebuyer criteria.
Remember, there is only one credit allowed per home.
What about a single person who qualifies for the credit and has a co-signer or co-owner, such as a parent who does not qualify?
That person can still claim 100% of the credit.
