2008 gave us the Home Buyer Tax credit for first time home owners. And you know when a new tax credit comes along, fraud can’t be far behind. Reducing fraud and expanding the Home Buyer Tax credit was part of the Worker, Homeownership, and Business Assistance Act of 2009 back in November. And to support new law, the Internal Revenue Service has just released new form (Form 5405) that eligible homebuyers need to use in order to claim the first-time homebuyer credit this tax season.
Here are some highlights taken from IRS news release regarding the new form:
- The IRS expects to start processing 2009 tax returns claiming the homebuyer credit in mid-February.
- Early taxpayers claiming the homebuyer credit may see tax refunds take an additional two to three weeks.
- New documentation requirements mean that taxpayers claiming the credit cannot file electronically and must file paper returns.
- In addition to filling out a Form 5405, all eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:
- A copy of the settlement statement showing all parties’ names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
- Mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
- Newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
- The new law also allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence. Certain qualifications apply.
So the bottom line……….
Make sure you have the required documentation to claim the credit and expect your refund to take 8 – 12 weeks ! ! ! ! Once again the innocent pay for those who seek to commit fraud ! ! !