Do you have to repay The First-Time Homebuyer Credit?

Reminders Letters

If you received the tax credit and do not make yearly payments you will receive a letter from the IRS asking you to make the required payment.  These letters are called "Reminders Letters".  In the past the IRS was mailing letters to both the taxpayers who pay their obligation and does that forgot to pay.  The IRS will no longer mail you a reminder letter if you are paying on time, April 15 or before.

Taxpayers Affected

If you bought a home in 2008 and claimed the First-Time Homebuyer Credit, the credit is similar to a no-interest loan and must be repaid in 15 equal annual installments that began with your 2010 return. Also, anyone who sold their home, or stopped using it as their main home, may have to repay the entire credit whether their home was purchased in 2008, 2009 or 2010. 

IRS Credit Lookup Tool 

The IRS has an online lookup tool on the IRS website to check your repayment obligation. To access the tool you will need: your Social Security number, date of birth and complete address. If you file a joint return, you’ll only be able to access your portion of the First-Time Homebuyer Credit account information.  The tool will show the original amount of the credit, annual repayment amounts, total amount paid and the total balance left to be paid. You will be able to print your account page to share with your tax preparer and keep for your records.

Installment payments and Form 5405

If you make an installment payment, you do not need to attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, to your tax return. However, if you are repaying the credit because the home stopped being your main home, you must attach Form 5405.

Source:  To access the First-Time Homebuyer Credit Lookup Tool, 24 hours a day, seven days a week, visit the IRS.gov website.

 

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