First Time Homebuyer Credit

If you purchased a home in 2010, you may be eligible to claim the First-Time Homebuyer Credit, whether you are a first-time homebuyer or a long-time resident purchasing a new home.

Criteria: Must be at least 18 years old on the date of purchase (married couple-only one spouse), and you must not be a dependent on someone else tax return.

Some of the provisions and requirements:

1. You must have bought – or entered into a binding contract to buy – a principal residence located in the United States on or before April 30, 2010- you must have closed on the home on or before September 30, 2010.

2. You and your spouse – if you are married – must not have jointly or separately owned another principal residence during the 3 years prior to the date of purchase.

3. Under the long-time resident homebuyer provision: You and your spouse – if you are married – must have lived in the same principal residence for any consecutive 5 year period during the 8 year period that ended on the date the new home is purchased.

4. The maximum credit for a first-time homebuyer is $8,000, half that amount for married individuals filing separately. The maximum credit for a long-time resident homebuyer is $6,500, half for married individuals filing separately.

5. You must file a paper return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit.

6. Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit.

For more information about these rules including details about documentation and other eligibility requirements for the First-Time Homebuyer Tax Credit, consult your accountant or the IRS.

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