IRS is rejecting my return without a Form 5405, but when I try to add it and answer the questions, TurboTax decides I don't need a Form 5405 and won't let me add it. How?

[jesse-tov-gmail-]

I received the First-Time Homebuyer Tax Credit in 2008. In 2014 I disposed of the home and paid back the rest of the credit. Since 2014, the IRS has required me to file Form 5405 every year to tell them (again) when I disposed of the home

[Critter-3]

OMG ... you sold the home back in 2014 and you have filed a 5405 every year since telling the IRS you don't need to file a 5405 ????    How ???     If  you  filed a FINAL 5405 and paid the rest of the credit back in 2014 then you should NOT be filing a form 5405 any longer so the TT program is correct.   

Your only option would be to mail in a return with a letter explaining that you did file the final 5405 with the 2014 return years ago and that it is no longer needed and to please correct their system.  

[Opus 17]

So you were required to file form 5404 in 2014, and you either paid nothing extra, or repaid the remaining credit at that time.  You should not have been filing form 5405, and you should not be paying the $500 per year installment.

When you try to e-file, and the IRS expects to see a $500 payment, and you don't include a payment, they assume that you sold the home and ask you include form 5405 to explain.  You can remove the e-file block (and the request for form 5405) if you include the payment the IRS expects, but of course you should not pay money you don't owe.

Hopefully you have not been paying $500 per year since 2015, because you won't be able to get most of that back.

You can look up what the IRS has on file for you regarding the FTHB credit on this web site.

https://sa.www4.irs.gov/irfof-fthb/notice

If you filed form 5405 in 2014 and supposedly closed the credit but the database still shows you owing, you can't e-fille this year.  You will need to print your return and file by mail.  And you should call the Taxpayer Advocate Service about the problem.  

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

Be sure to have a copy of your 2014 return as proof.  If you need a copy and don't have one, here is how to get it.

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

I would probably not attach a statement to your 2021 return when you file by mail, there's a good chance it will get lost and some agent or computer will send you a letter anyway.  But I suppose it won't hurt to try.