• 2008 homebuyers who received the First Time Homebuyer (FTHB) credit (2008 Form 1040 line 68) were required to repay the credit, starting in 2010 – the credit was a loan.
    • The repayment is spread over 15 years, at $500 per year, so payments could continue through 2024.
  • If taxpayer has already repaid their entire credit (ahead of schedule), do not enter any information in TaxSlayer.
  • TaxSlayer now has an e-file warning if the prior return had a payment but the current return does not.
  • If the taxpayer is unsure of the status of repayment, information can be looked up online at irs.gov/individuals/first-time-homebuyer-credit-account-look-up .
    • Note: This link is at the bottom of the Form 5405 - First-Time Homebuyer Credit and Repayment page, after the first question on that page is answered.
  • If the credit has not been fully re-paid, the 2008 tax return was a MFJ return, and the 2024 tax return is also a MFJ return, then separate pages are required for taxpayer and spouse.
    • Each is credited with half of the repayments made in prior years.
    • If one spouse on the 2008 tax return is deceased, that half of the credit does not have to be repaid; refer to Form 5405 instructions.
  • Repayment of some or all the un-repaid portion of the credit may be required if the home is disposed of.
    • Repayment is affected by whether the house was disposed of at a profit or loss.
    • If the house is no longer the primary residence of the taxpayer because of destruction or condemnation, the return is out-of-scope.
  • If the taxpayer has not repaid all the credit, go to the Form 5405 - First-Time Homebuyer Credit and Repayment page [Federal Section > Other Taxes > First-time Homebuyer Repayment].
    • Note that this TaxSlayer page pertains only to the credit given in 2008. If the credit was given in 2009, 2010, or 2011, that would have been a grant that doesn’t need to be repaid.
    • If the taxpayer has repaid only the minimum - $500 per year – beginning in 2010, then the “the full amount repaid with your prior year tax returns” would, for the 2024 tax return, be 14 times $500 for a total of $7,000.
      • Don’t assume the taxpayer has paid only the minimum amount each year – ask. If the taxpayer is unsure, that information can be looked up online (see the irs.gov link above).
    • TaxSlayer has Carryforward for this, as well as a warning if a payment was made in the prior but is not being made on the current return.
    • Click “Continue” when done.
    • Note: Form 5405 is one of ten for which a PDF can be created from a menu within the return, in this case, the Other Taxes menu page. It is not required to be filed when the taxpayer is making a routine annual payment.

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