Blue Mass Group

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Those who got first-time homebuyer tax credit in 2008 must pay it back…

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But if you got it in 2009 or 2010, you don’t need to pay any of it back. Interesting!

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Uncle Sam has a reminder for some people who took advantage of the first-time homebuyer tax credit three years ago: He wants his money back.

Americans who bought homes in 2008 using the government’s tax credit will be required to start repaying the credit beginning with their 2010 tax return, according to the Internal Revenue Service.

In an odd twist, those who took advantage of a nearly identical tax credit in 2009 or 2010 will not be required to pay it back.

So does this sound fair to you guys? Personally, I think someone screwed up by not having the same hook on those getting the break in 2009 and 2010.

Thoughts?

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Comments

  1. Is it fair that there was no such tax credit in 2007? Tax rules change from year to year. Big deal.

      • Like any other bill we pay, we should not be looking at taxes as a burden or a punishment – we should look at them and ask if we’re getting an honest value for our money.  Given everything that is accomplished with tax dollars – roads, bridges, schools, police and fire protection, and the myriad of other good things taxes bring us, I’d say every single one of us is well served for the amount we actually pay.  

    • The IRS thinks it is

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      IR-2008-106, Sept. 16, 2008

      WASHINGTON – First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.

      Available for a limited time only, the credit:

      Applies to home purchases after April 8, 2008, and before Jan. 1, 2009.

      Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.

      Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

      However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.

      • It’s pretty clear that you can take it as a credit on your taxes (that’s dollar for dollar). But that it’s an interest free loan.  You titled the post “must pay it back” … really?  You need to pay back a loan?  Who knew?

      • The government made 0 interest loans to first time home buyers, and used the IRS to process the loans and cut the checks. Loan’s gotta be repaid, starting now, which everybody knew – or should have cuz it’s right there in your quote.

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        p>Seems to me doing it this way was a nice efficient to process the loans and cut the checks.

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        p>Maybe this is not a “tax credit” in your eyes. Semantics. But if you want to make tax breaks for the poor permanent, I’m with you.

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        p>And, let’s talk about tax cuts and tax credits for the rich. Which they never seem to pay back.

        • … temporary tax breaks never are and their expiration could make or break any attempt to fight the deficit, but you won’t find conservatives pointing this out (emphasis mine):

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          One thing to note: The document assumes that the high-income tax cuts expire in 2012, as they’re currently projected to do. The administration isn’t counting that in their $1.1 trillion of deficit reduction, but if the prediction is wrong and the Bush cuts do get another extension, they’ll wipe out most of this budget’s savings in one fell swoop. Conversely, if we decided to get serious about the deficit and let all of the Bush tax cuts expire in 2012 — yes, including the cuts for the not-so-rich — the reduction in the deficit would be vastly larger than anything envisioned in this budget. It’s an odd turn of events, but for all that this budget, and the various Republican proposals, attempt to actually do for the deficit, the biggest single thing we could do would be to do, well, nothing: Let the Bush tax cuts expire and let the health-reform law and the associated Medicare cuts and excise tax get implemented as planned. Doing by not doing: That’s the zen of deficit reduction. Somehow, I doubt Washington will find it very calming.

  3. If they want to DEFER repayment for a year or two, mazel tov.  But to offer the credit in the future, in a sustainable fashion, then repayment by past recipients makes it more viable.

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    p>Defer?  OK.  Forgive?  No.

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    p>(Full disclosure – I THINK my son got one of these when he bought his house, but am not sure where on the not-offered, repay, forgive, continuum he falls…he should pay it back regardless if he got it)

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