DC's First-Time Buyer Tax Credit Is Gone, But Maybe Not For Good

• November 8th 2010

by Joe Marhamati

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The $5,000 tax credit available to DC home buyers expired at the end of 2009, but that doesn’t mean that DC buyers may never be able to take advantage of it again. UrbanTurf placed a call to Congresswoman Eleanor Holmes Norton’s office this morning, and a representative said that while there is no timeline for passage of another credit, if and when it is enacted, it could be applied retroactively for DC residents who have purchased a home since the credit expired at the end of 2009. Below is an overview of the credit and how it can be applied for, if legislation is passed enacting it.

Quick Overview

The DC tax credit was not just for those who had never owned property before; you could qualify for the credit so long as you had not owned property in DC within the year previous to when you applied for it. The property must have been a primary residence (house, condo, or co-op), and it could not have been a gift or inherited from a family member. Most importantly, eligibility was limited to those making less than $90,000. If you made $70,000 or less annually ($110,000 filing jointly), you qualified for the full $5,000; if you made between $70,000 and $90,000 ($110,000 and $130,000 jointly), you qualified for a partial credit. If the credit is enacted again, the requirements will likely be similar to those above.

Claiming the First-Time Credit

When in effect, there was not a lot of readily available information online about how one would go about claiming the tax credit, but all that was required was simply filling out IRS Form 8859 and submitting it with your annual tax returns. If after filing your taxes it was determined that you owed money to the federal government, the credit would cover that liability up to the amount you qualified for. If you were owed money by the government, then the $5,000 was factored in to the refund that you received.

Update: After 45 minutes on the phone with the IRS, UrbanTurf was told that the DC credit is actually still active. However, the IRS representative could not provide any offical written confirmation of this statement. The Holmes’ office position appears to be the most credible source at this time.

This article originally published at https://dc.urbanturf.com/articles/blog/dcs_first-time_buyer_tax_credit_is_gone/2651.