Maryland Form 502SU line ww - Eligibility

Forum|Forum|2 years ago
February 2, 2024
2 replies
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My wife and I bought a home in January of 2024. At the same time, I came across the First-Time Homebuyer Savings Account.

We have been sharing a joint savings account since 2022 and have been saving money towards a down payment for a home. We turned a pre-existing individual savings account into a joint account (did not create a new one). We saved consistently, well over the $5,000 deduction max; however, over the last year, twice, we unfortunately over-saved and ultimately had to draw some funds back out. We never pulled out the "first $5,000" for the year.

Are we still eligible for the first-time homebuyer savings account deduction? We ended 2022, 2023, and 2024 (before our down payment) with a net of +$5,000 contributions per year.

Ultimately, >$15,000 saved over three years, >$15,000 spent on down payment; however, we "recycled" an old savings account and had additional transactions (due to over-committing savings in excess of the $15,000).

Deduction

AmyC

Level 15

The law states that you qualify for the subtraction if it was contributed during the tax year in question to that account. You must purchase a house within 15 years so you have accomplished that. Congratulations!

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dmertz

Level 15

It appears that your use of the account for purposes other than buying the first home the disqualifies it from being a first-time homebuyer savings account.

From https://www.marylandtaxes.gov/individual/credits-deductions/index.php

Any account established with a financial institution can qualify as a "first-time homebuyer savings account" so long as the account is established for the sole purpose of paying or reimbursing eligible costs for the purchase of a home by the account holder in the state of Maryland. An account holder may not be the account holder of more than one account.