Escrow Trust Advisors | Help for Repaying Homebuyer Tax Credit
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Help for Repaying Homebuyer Tax Credit

Help for Repaying Homebuyer Tax Credit

Back in 2008, a first-time homebuyer tax credit was established to help with the damage the housing crisis had created. The credit acted as a no-interest loan, and those who used it were able to pay it back over time in annual installments through their tax return.

Sadly, the payback requirement was eliminated in 2009, and many borrowers found themselves in a predicament. The tax credit was of course gone, but more concerning was how they might pay back the government the money they borrowed. Additionally, taxpayers were responsible for keeping track of all their own records, making a stressful situation worse.

The IRS recently created a tool to help organize information and streamline the process. Now, borrowers can see their balance, the amount paid back to date, total tax credit received, annual installment amount, and the exact payback amount online. Taxpayers simply enter their social security number, birthday and some other identifying information. To access the tool, please visitthe IRS website.

This tool isn’t exclusive to 2008 homebuyers. Those who used the tax credit in 2009 or 2010 and sold their homes within three years of purchase are also required to pay back their benefit.