Does the Original $7,500 Tax Credit Still Have to Be Repaid?

• February 17th 2009

by Will Smith

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One of the leading questions to emerge about the $8,000 tax credit in the final stimulus bill is whether those who applied for the original $7,500 tax credit last year will get the benefits of the new legislation. Of relatively minor importance is the $500 difference between the two. What really matters is that the $7,500 credit has to be paid back over the next 15 years; the $8,000 never has to be repaid.

“So everyone who purchased a house after April 2008 is screwed by only being eligible for the $7500 that has to be paid back?!” read an irate comment on our blog post from earlier today.

The answer, unfortunately for those folks, appears to be yes. According to the Baltimore Sun, “Sorry. You get one credit or the other, depending on the year you bought the house.”

The Wall Street Journal concurs: “The new credit is retroactive to Dec. 31, 2008, which means that anyone who buys a house this year, through August, won’t have to repay it. First time buyers who used the credit in 2008 still have to pay it back over a 15-year period.”

So there you have it. People that already applied for the $7,500 tax credit will not get the benefit of the $8,000 credit in the new stimulus bill, and will still have to pay the money back.

This article originally published at https://dc.urbanturf.com/articles/blog/does_the_original_7500_tax_credit_still_have_to_be_repaid/550.