If you haven’t heard, the first-time homebuyer credit has been extended, but the people who qualify haven’t been able to claim the credit until now.
On January 15th the IRS released Form 5405 whicheligible homebuyers need to claim the first-time homebuyer credit this tax season. To deter fraud the IRS has implemented additional required documentation. Taxpayers claiming the homebuyer credit must file a paper tax return and cannot e-file because of the added documentation requirements.
Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return.
The new law also authorizes the credit for people who have lived in their homes for a 5-year consecutive period during the previous 8-years if they purchase a new main residence.
The IRS expects to start processing 2009 tax returns claiming the homebuyer credit in mid-February. Normally, it takes about four to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached.
More details can be found on IRS.gov