The first-time homebuyer tax credit has been extended to cover home sales in contract by April 30, 2010 but it is doubtful that this tax credit will be extended once more.
However, there are a few things that one must meet in order to receive the credit.
- Income limits of $125,000 for individuals and $225,000 for couples.
- You must not have owned a home for three years
- The tax credit is applicable only to primary residences.
If you’re not a first time home buyer you can still get a credit of up to $6,500 but only if you’re purchasing a new primary home and have owned and lived in a home for five of the last eight years.
In order to claim the first-time homebuyer’s tax credit you must do the following:
- File Form 5405 with your income tax return
- Attach a signed HUD-1 to your taxes
- File by mail, not electronically
In 2009 you could file for the tax credit electronically but some received their refund before their claim was finalized. The IRS has acknowledged around 160 schemes involving people who have claimed this credit inaccurately.