Taxpayers who bought a home in 2008 and claimed the First Time Homebuyer Credit are required to start paying the credit back beginning with their 2010 tax return. The terms of the 2008 credit require that it be paid back over a 15-year period starting with 2010’s tax returns.
That means that any taxpayer who claimed the maximum $7,500 credit in 2008 will have to add $500 to their income tax liability for the next 15 years. If the house gets sold before the 15 years are up, the remaining repayment balance is due the year the house is sold.
The 2008 credit should not be confused with nearly identical credits that were available in 2009 and 2010 and did not require the credit to be paid back unless the house ceased to be a main home within the 36 months following the purchase.
The news may come as a bit of an unwelcome surprise to some taxpayers who may have forgotten the terms of the 2008 credit which, in reality, was more like a non-interest 15-year loan from the IRS. The IRS will be sending out reminders to those taxpayers impacted by the 2008 Home Tax Credit.
If you’ve purchased a home in the past few years and are unsure if you need to repay your Homebuyer Credit, please speak with your Jackson Hewitt tax preparer. Your local Jackson Hewitt office opened on January, 2003 with one office at our present location at 2022 Sycamore Road in Dekalb.
John Saponari runs the offices and day to day operations, Sharon Saponari handles HR issues and Greg W. Davis is the CPA on staff. We now have 7 offices in Dekalb, Sycamore, Rochelle, and Belvidere. For more information, call us at 815-756-8299 or visit www.JacksonHewitt.com.