How to File Taxes for First Time Homebuyer Credit 2009

Claiming the 2009 Credit is not difficult and can be done in a few minutes

This article will give you step by step instructions on how to amend your 2008 tax return to immediately claim the 1st time homebuyers credit (up to $8000 that does not need to be repaid) for a home purchased in 2009. An updated article with new rules is included in the resources.

Things You'll Need

• Your 2008 tax return
• IRS form 1040X
• IRS Form 5405
• A calculator
• A pen
• Your HUD Settlement statement from your home purchase.

Instructions

1. The first thing to do is gather your materials. Your 2008 tax return will be needed to fill out the 1040X. Your HUD statement is the two column legal size page that lists what was paid by the buyer and what by the seller for your home purchase (it is usually one of the first forms in the pile of paper given to you at closing.) The tax forms are available from the IRS or you can download them from the following links:

   http://www.irs.gov/pub/irs-pdf/f1040x.pdf

   http://www.irs.gov/pub/irs-pdf/f5405.pdf

2. The next step is to verify you are eligible for the credit. In order to claim the credit for a 2009 home purchase:
   You must purchase a home, that you will use as your Main Home, between Jan 1, 2009 and Nov 30, 2009.
   You (nor your spouse if filing together) must not have owned a Main Home anytime in the last 3 year period preceding the purchase of this home.
   Your adjusted gross income must be <$95000 (or $170000 if married filing jointly)
   You cannot be a non-resident alien
   You cannot have purchased the home using DC 1st Time Homebuyer Credit
   You cannot have purchased the home from a relative
   You cannot have acquired the home by gift or inheritance
   The home must be in the United States

   Notice that owning a home in the last 3 years doesn't make you ineligible - it has to be your Main Home. A vacation property or a property you rent to someone else does not exclude you from using the credit.

3. Now you need to fill out the Form 5405.
   -The name, SSN and address are self explanatory (make sure the name and SSN match the original 2008 return.)
   -Date acquired should match Block 'I' from your HUD statement.
   -Check the box in Part I, C of the form (these instructions are for claiming the credit for a 2009 purchase on your 2008 return.)
   -Line 1 should be $8000 or %10 of the price of the home (use Line 101 from the HUD statement for the price) whichever is smaller (if you purchased the home with someone else who is not your spouse on the return - allocate the credit in any reasonable way that would not cause both people combined to claim more than $8000, and don't try to cheat it to give more credit than deserved just because the other person is ineligible to claim the credit.
   -Line 2 is generally the Adjusted Gross Income from your 2008 return. It is usually the last line on the front page of the return and will specifically say "This is your adjusted gross income." If you have income from Puerto Rico or file Form 2555 or 4563 - consult a tax expert.
   -Do the math for lines 3, 4, 5 and 6 as the Form instructs and you will have your credit amount.

4. Now you have to fill out the 1040X. It can get a little confusing, but follow the instructions (linked at the bottom of the page) and I will provide some help here.

   -Calender Year should be 2008
   -The personal information should be currently accurate but the Name and SSN must match your original return.
   -Column A should be from your original return.
   -Column B should be blank, except for Line 15, which should be the exact credit you calculated on the 5405 from the step above.
   -Column C, lines 1-14, should be the same as Column A.
   -Column C, Line 15, should be Line 15 A and B added together.
   -Line 16 and 17 should reflect any payments you made if you owed money on your original return (you did not get a refund.) It should reflect what was ACTUALLY PAID, not what you owed.
   -Line 19 should be the refund you had on your original return
   -Do the math for Line 20
   -Line 21 should be blank
   -Line 22 should be the exact amount of the credit you calculated on the 5405 (this is the amount you will be receiving (if it doesn't match Line 6 of the 5405, check your math.)
   -Copy the amount on Line 22 to Line 23
   -Sign and date the bottom of the form.
   -The only thing to fill out on the back is Part II Explanation of Changes: Write: "Claiming 1st Time Homebuyer Credit for home purchased in 2009.

5. Compile and mail your return.

   Staple the Form 5405 behind the 2 pages of the 1040X and mail to the address below(Use the appropriate City State and ZIP for the state you live in based on the abbreviation after the ZIP.)

   Department of the Treasury
   Internal Revenue Service Center
   Austin, TX 73301 (KY, LA, TN, TX, MS)
   Kansas City, MO 64999 (AR, DE, CT, IN, MI, MO, NJ, NY, OH, PA, RI, WV)
   Andover, MA 05501-0422 (DC, MA, MD, ME, VT, NH)
   Atlanta, GA 39901 (AL, FL, GA, NC, SC, VA)
   Fresno, CA 93888-0422 (AK, AZ, CA, CO, HI, ID, IL, IA, KS, MN, MT, NE, NV, NM, ND, OK, OR, SD, UT, WA, WI, WY)

6. Wait for the check. You can't have it direct deposited and it can take several weeks for the check to arrive. If you move, contact the IRS to update your address.

Tips & Warnings

• You must stay in your new home as your principle residence for at least 3 years from the date of purchase. If you do not, you may have to repay the credit.

Resources

• IRS Form 1040X
• IRS Form 5405
• IRS Form 1040X Instructions
• Update article with latest rules