New Homebuyer Tax Credit Form Released
On January 15, 2010 the IRS released a new form that home buyers who are eligible for the tax credit need to use to claim the tax credit. There is new documentation requirements to deter fraud related to the first time home buyers tax credit.
according to the article titled, "New Homebuyer Credit Form Released; Taxpayers Reminded to Attach Settlement Statement and Other Key Documents," written by the TaxAlmanac, "the new form and instructions follow major changes in November to the homebuyer credit by the Worker, Homeownership, and business Assistance Act of 2009. The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the tax credit."
Early taxpayers claiming the tax credit may see tax refunds take and additional two to three weeks.
In addition to filling out Form 5405, all eligible home buyers must include one of the following documents to receive the tax credit ALONG with their 2009 tax return:
1. A copy of the settlement statement showing all of the parties' names, signatures, property address, sales price and date of purchase.
2. If you purchased a mobile home and you are unable to get a settlement statement, you can use a copy of the executed retail sales contract showing all of the parties' names, signature, property addresses, purchase price and the date of purchase.
3. For a home that is new construction where a settlement statement is not available, you can use a copy of the occupancy certificate showing the owner's name, the property address and the date of the certificate.
The new law also allows a long-time resident of the same main home to claim the home buyer tax credit if they purchase a new principal residence. Eligible taxpayers who qualify have to show that they lived in their old homes for five consecutive years during the eight year period ending on the purchase date of the new home. As stated by the TaxAlmanac, "
The IRS has stepped up compliance checks involving the home buyer credit, and it encouraged home buyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:
1. Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
2. Property tax records or
3. Homeowner’s insurance records.
The IRS is also reminding home buyers that these new documentation requirements mean that if you are claiming the credit, you cannot file electronically and you must file a paper return.
When can you expect your refund? Normally, it takes from four to eight weeks to get a refund claimed on a completed and accurate paper return with all the correct attached documents. For home buyers who file early, the IRS is expecting the first refunds based on the home buyer tax credit, will be issued towards the end of March.
The IRS is encouraging taxpayers to use direct deposit to expedite their refund. To tract the refund, taxpayers can visit www.IRS.gov and use the "where's my refund?" portion of the site.
If you are interested in finding our more details on claiming the tax credit and the instructions to the Form 5405, please visit www.IRS.gov.
