The law created an $8,000 tax credit available to first time buyers who are purchasing their primary residence, and a potential $6,500 tax credit for some existing homeowners who purchase another principal residence.
The IRS has issued some additional guidance regarding filing for the tax credit when homebuyers submit their 2009 tax return:
"Because of the documentation requirements for claiming the credit, taxpayers who claim the credit on their 2009 tax return must file a paper — not electronic — return and attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit" (Highlight ours)
For additional information on the documentation required when submitting a 2009 tax return, visit the IRS website here.
For an overview of information about the tax credit for first-time buyers, the Center has produced a fact sheet, here.
As we stated in November, first-time buyers should never base their home-buying decision on a tax credit. There are MANY other factors when deciding whether home ownership is right for YOU or not. Before purchasing YOUR first home... take a Home Stretch Workshop (pre-purchase education workshop) to learn what's involved, and speak with a non-profit Housing Counselor to see if you might qualify for any down-payment assistance or other first-time buyer programs.