How to Apply for the 2010 $8,000 Housing Credit

The Internal Revenue Service offers an $8,000 maximum tax deduction for qualifying home purchases in 2010. You have to fill out an additional form to determine the deduction amount for which you qualify. The housing credit is added to your 1040 in the form of a tax credit, reducing the amount of taxes you owe to the IRS.

Things You'll Need

• Form 5405
• Form 1040

Instructions

1. Check your eligibility status for the housing credit program. You must have entered in a contract to buy your home before May 1, 2010 and the purchase has to be closed before July 1, 2010 to qualify for the tax credit. To be eligible to qualify for the full $8,000 tax credit, you must be a first time homeowner. Long term homeowners are only eligible for $6,500 in credits.

2. Gather the required information to fill out IRS form 5405. You need the home purchase date, your Social Security number, the purchase price of the home and your modified adjusted gross income to fill out the form. Follow the instructions for each line to calculate the maximum housing credit amount you qualify for. This credit amount adjusts with the purchase price of your home, your marital status and your income.

3. Enter the result from line 10 of form 5405 onto line 67 on form 1040. Attach form 5405 to your 1040 tax return and mail both forms in for the tax credit.

References

• IRS: First-Time Homebuyer Credit
• IRS: First-Time Homebuyer Credit Questions and Answers: Homes Purchased in 2009 or 2010
• IRS: Claiming the Credit on Your Tax Return

Resources

• IRS: Where to File Tax Returns - Addresses for Individual Taxpayers