The 2010 Homebuyers Tax Credit’s April deadline has passed for the majority of first-time homebuyers and sellers – but there are some groups still eligible to qualify for the tax break.
If you are a member of the military, the Foreign Service or part of the intelligence community serving outside the US, you can still take the $8000 credit for first time buyers or $6500 credit for sellers and repeat homebuyers for an additional year.
The Original Home Buyers Tax Credit
After the Obama Administration extended the original Homebuyer tax credit from November 2009, the new guidelines required qualified purchases to include having a binding sales agreement in place before April 30, 2010 with a closing date set by June 30, 2010. Those who qualified for the tax credit had the option to include it on either their 2009 or 2010 tax forms. Those who did not meet those qualifications are no longer eligible for the tax credit.
After the April 30th date, many hoped that the plan would be again extended to all people. The housing market was looking up again as so many took advantage of the tax credit and became first time homebuyers. Additionally, people were willing to sell their homes for a credit of $6500, helping the market to restabilize. Individuals that qualified for the credit had the option of claiming the credit on either their 2009 or 2010 return. In light of the better housing circumstances and because the government had more pressing issues to deal with, the extension did not come to pass.
However, those who are in service with the military or are employees of the federal government’s intelligence agencies or a member of the Foreign Service have to option of an extended tax credit. Those who are on extended duty outside of the United States for at least 90 days between December 31, 2008 and ending May 1, 2010. Those who are forced to return to the United States for medical reasons before fulfilling their original duties may qualify for a one year extension.
Eligible military or federal employees have an extra year to purchase a home in the US and still qualify for a credit. Contracts must be entered into by April 30, 2011 with a closing date of not later than June 30, 2011. Military and government personnel and their spouses are eligible for the credit if at least one of them has been serving overseas. Homes to be purchased can not exceed $800,000 and purchases must be made by someone at least 18 years of age.
To Claim First Time Homebuyer’s Tax Credit
In order to claim the tax credit, a copy of the properly executed settlement statement is required to be attached to the income tax return and Form 5405 First Time Homebuyer Credit and Repayment of the Credit needs to be completed.
For those who are purchasing new homes or mobile homes and do not receive a settlement statement, the following requirements apply:
- Mobile homes – who include a copy of the executed retail sales contract showing all parties’ names, property address, purchase price and date of purchase.
- Newly constructed homes – include a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
For more information about the extension of the Homebuyer Tax Credit, visit the IRS website where you can also download appropriate tax forms.