Deadline for Homebuyer Credit Purchases Nears for Eligible Members of the Military
The Internal Revenue Service reminds eligible members of the military and certain other federal employees purchasing a home that they have until April 30, 2011, to sign a binding contract and still qualify for the first-time homebuyer credit.
Under a special provision, members of the uniformed services, members of the Foreign Service and employees of the intelligence community must enter into a binding contract by April 30, and close on the purchase by June 30, 2011 to get a refundable tax credit of up to $8,000 when eligible. This applies to individuals who served on qualified official extended duty outside of the United States for at least 90 days after Dec. 31, 2008, and before May 1, 2010.
In general, taxpayers must have closed on a principal residence before Oct. 1, 2010, to qualify for the credit. However, certain members of the military and other federal employees were granted additional time to buy a principal residence in the U.S.
Claiming the Credit
Besides providing a benefit to first-time homebuyers and purchasers who haven’t owned homes in recent years, the law allows a long-time resident of the same main home to claim the credit if they purchase a new principal residence.
To claim the first-time homebuyer credit, all eligible homebuyers must fill out Form 5405 and include with their return supporting documentation, such as a copy of the settlement statement showing all parties' names and signatures. Eligible homebuyers making 2011 purchases can get an early tax benefit by claiming the credit on their 2010 return or waiting until next year and claiming it on their 2011 return.
Related Item: Tax Information for Members of the U.S. Armed Forces