Repayment of the First-Time Homebuyer Credit

 If you were one of the recipients of the original first-time homebuyer credit in 2008, you must begin repaying that credit by adding 1/15th of the credit to your tax liability on your 2010 income tax return. The first-time homebuyer credit was first available to taxpayers who purchased a principal residence after April 8, 2008. This credit was part of the Housing and Economic Recovery Act of 2008. This credit was expanded and modified in 2009 and 2010. The unique provision of the initial credit allowed in 2008 was that it had to be repaid over a 15-year period beginning on the taxpayer’s 2010 return which is due by 4/18/2011. In essence, the original credit was an interest-free loan. The maximum amount of the original credit was $7,500. So if you were able to claim the credit on your 2008 tax return, you must file form 5405 with your 2010 tax return and add an additional tax on the other taxes section of form 1040. If you purchased your home after 2008 and before 5/1/2010, you may have claimed a first-time homebuyer credit up to $8,000 on your 2009 tax return. Or, if you purchased a home after 11/6/2009 and before 10/1/1010 (with a binding contract dated before 5/1/2010) you may have claimed a long-time resident credit up to $6,500. Neither of these credits are subject to repayment as long as you do not dispose of the home or it ceases to be your main home during the 36 month period that follows the date on which you purchased the home.