How do I enter my homebuyers credit when the turbo tax keep rejecting my Homebuyers Credit entry?

[DawnC]

There is no homebuyer credit on the federal return.   Where are you entering information for a credit?  Are you entering a state-specific credit?   If so, what state?  

Deductions for Homeowners   This list the deductions you can take on your federal return.   Let us know if you have trouble entering any of these items.  

[ee-ea]

@DC441

Are you asking about repaying the 2008 credit?

[stephaniej620]

I'm having the same issue, it is related to the 2008 Homebuyer Credit. When I look it up on the IRS site, it says I owe -$500 and I don't know how to proceed. My return keeps getting rejected. 

[Opus 17]

---

@stephaniej620 wrote:

I'm having the same issue, it is related to the 2008 Homebuyer Credit. When I look it up on the IRS site, it says I owe -$500 and I don't know how to proceed. My return keeps getting rejected. 

---

If you moved out of the home in a year earlier than 2023 (Stopped using it as your main home), you were supposed to report the move out on form 5405 in that year.  You owed a full or partial repayment at that time, and owed nothing further in any future tax year.   (Or if you moved out due to divorce, your responsibility might have been transferred to the other spouse.) If you tell Turbotax "yes I got the credit" and "I moved out in an earlier year" turbotax will tell you that you don't owe a repayment this year, but then the IRS may reject the return if they think you do owe a repayment (because you failed to file in the year you actually did move out.)

The correct thing is to file by mail this year without the payment, then file an amended return for the year you did move out, that includes form 5405 to calculate whatever payment was due at the time.

A workaround would be to say that you still live in the home and did not move out.  But this might result in making a payment you don't owe, depending on how, when and why you stopped using the home as your main home.  

[stephaniej620]

Thank you for responding! The house sold in February 2023 and the credit was paid off at that time. Does that mean I still have to file by mail? 

[Opus 17]

I don't know what you mean by "the credit was paid off at that time" because you can only pay back the credit on your tax return.  You have to do this in its own section, separate from reporting the sale in the capital gains section.

What should happen is that you go to the First Time Homebuyer interview and answer that you sold the home in 2023.  The program should ask for the purchase price, selling price, amount of original credit, and amount of credit you have paid off so far.  If your gain on the sale (increase in the home's value) is more than the credit, then the remaining amount of the credit is added to your tax owed.

If this is not working correctly, post back here.  I checked briefly against a list of known errors and I did not see this listed, but that doesn't mean there might not be a program bug.  

[stephaniej620]

On the 2022 tax return the remaining balance for the credit was paid, it's specified on line 10 with Form 5405. I've answered the questions regarding the sell of the home and it says I do not owe for the credit, nor does the IRS website, however it is the reason my return is getting rejected. 

Reject Code S2-F1040-147

[Opus 17]

---

@stephaniej620 wrote:

On the 2022 tax return the remaining balance for the credit was paid, it's specified on line 10 with Form 5405. I've answered the questions regarding the sell of the home and it says I do not owe for the credit, nor does the IRS website, however it is the reason my return is getting rejected. 

Reject Code S2-F1040-147

---

You said above you sold the home in 2023 but now you say you sold in 2022 and you reported the sale on form 5405 and paid off the credit as part of your 2022 tax return?  What year are we talking about?

I want to be clear what you are saying.  Your 2022 tax return includes a form 5405.  And the repayment amount from line 8 of form 5405 was copied to line 10 of Schedule 2 (Additional taxes).  And the total of schedule 2 from line 21 was copied to form 1040 line 23?  But when you look up your credit at the IRS web site it says you still owe $500?  

How much did you pay in 2022 from form 5405?

The error message says that the IRS e-file validation database thinks you owe a payment.  If you included form 5405 in 2022, and the IRS databases are not updated to reflect the payment and zero remaining balance, then you can't e-file this year.  You will need to file by mail.  You should also check your 2022 transcript to make sure the payment was recorded.  You may need to call the Taxpayer Advocate's office to get this straightened out.  There is nothing Turbotax can do for you.

https://www.irs.gov/individuals/get-transcript

https://www.irs.gov/taxpayer-advocate

On the other hand, if you are saying that your 2023 return (this year) includes form 5405 with repayment, because you sold your home in 2023, and the IRS is still rejecting, that is something that needs more investigation.   The repayment (you say you owe $500) should show on line 8 of form 5405 and be carried over to line 10 of Schedule 2 and line 23 of form 1040.  Are all these forms included when you print your tax return for review?

[stephaniej620]

The house was sold February 2023. The remaining $1,500 homebuyer credit was included on my 2022 return (I used a CPA and that's how they did it).

When I go to the IRS homebuyer credit look up site it says:

• Original credit amount: $0
• Annual re-payment amount: $0
• Total amount paid $500
• Total balance left to be paid: $-,500 (that's how it's shown)

The sell of the house did not qualify as a capital gain. 

[Opus 17]

---

@stephaniej620 wrote:

The house was sold February 2023. The remaining $1,500 homebuyer credit was included on my 2022 return (I used a CPA and that's how they did it).

When I go to the IRS homebuyer credit look up site it says:

• Original credit amount: $0
• Annual re-payment amount: $0
• Total amount paid $500
• Total balance left to be paid: $-,500 (that's how it's shown)

The sell of the house did not qualify as a capital gain. 

---

Your CPA was wrong.  If the sale occurred in 2023, it should have been reported on your 2023 return.  I also can't tell why the IRS shows a payment of $500 not $1500, and whether the minus sign is normal or abnormal.  For 2023, there is probably no way to fix this to allow you to e-file this year, you will have to print and mail your return.  I suggest you get the CPA to fix their mistake (for free).  Or you can try calling the Taxpayer Advocate Service. 

[stephaniej620]

Thank you for all of your help. I reached out to the CPA and I'll go from there.