As you may know, Congress began the tax incentive for first time home buyers in mid-2008 by offering a $7,500 tax credit to first time home buyers. Unlike the $8,000 tax credit that went into affect later for home buyers who purchased a home after January 1, 2009, however, the $7,500 tax credit is less of a “credit” and more of an interest-free loan that must be repaid over 15 years. The $8,000 credit is your money to keep; the $7,500 is not.
Home buyers who purchased their homes in late 2008 are out of luck; you get the $7,500 credit that must be repaid.
If, however, you purchased a home in early 2009 and already filed for the $7,500 tax credit, you may be able to claim the $8,000 first time home buyer tax credit instead by filing an amended 2008 tax return using IRS form 1040X. Due to the more complicated nature of filing an amended return, however, it would be best to enlist a tax professional’s help.
First Time Home Buyer Resources