IRS keeps rejecting filing because the First Time Home Buyer payment was not submitted. It is not letting me add the payment in my Turbo Tax filing. Please hel!!

[TerukoL]

What rejection code are you receiving? 

If you received an e-file rejection, don’t worry. An e-file rejection means that some things on your return don't match the IRS database, and you’re given the opportunity to fix them and refile. 

To get started, follow the instructions in the “Action Needed” email you received from turbotax@intuit.com. If you can’t locate the email, you have a couple of options:

1. Sign in to your TurboTax account and fix your return
2. Select your code from the list in the Common IRS rejections section below and follow the instructions

You can watch the video for an overview of the process.

[Opus 17]

When did you move out of the house where you received the 2008 credit?

The IRS first time homebuyer database apparently says you still owe repayment.  If you moved out of the house in a prior year, you were required to file form 5405 as part of that year’s tax return. In most cases, you were required to repay the full remaining amount of the credit at that time, and no repayment afterwards is owed.

If you did file form 5405 with your tax return in the year you moved out of the house, then you need to contact the taxpayer Advocate office service to get them to fix your their database.

If you did not file form 5405 in the year you moved out of the house, you can’t make a payment this year, and you will have to file by mail because of the rejection. You also need to go back and file an amended tax return for the year that you moved out and report the sale on form 5405 and repay the remaining amount of the credit.  (if you sold at a loss, you will not have to repay the remaining credit, but I suspect this is unlikely 13 years down the road.)

[DirkStrange]

Champ, you said,

"...if you sold at a loss, you will not have to repay the remaining credit, but I suspect this is unlikely 13 years down the road."

This is NOT as unlikely as you think it is.  I went almost 6 years after the loss of my house before I learned that I didn't have to pay the FTHBC back.

I lost the house which I received this credit for in 2014 through foreclosure.  And every year after that, as would file my taxes, TurboTax would simply ask if I sold the house. I always answered no because technically I didn't sell it....it was foreclosed. TurboTax would then subtract the $500 from my return as payment for the credit and then promptly move on to the next topic.  I never questioned it as I genuinely thought I was stuck with it.

It wasn't until 2021 when I learned that there were exceptions to paying back the loan, which I met. And now, I'm in the same boat.

• The IRS will not allow me to amend my 2014 Tax year income tax return because the time limit to do so has passed.
• I cannot Include form 5405 with my current taxes because that only applies to disposal of the home for the current year, not the actual year the home ceased being my primary residence.
• I cannot e-file without including the payment (which legally I don't have to pay) because it gets rejected.
• Everyone I ask gives the same canned answer or doesn't know.

I called the IRS and the person I spoke with outright refused to give advice on how to proceed. I had to sweet talk them into transferring me to "Legal", only to be disconnected the second they "transferred" me.  I'm at a loss as to what my next steps are. 

[AnnetteB6]

Instead of contacting the IRS for a resolution to your issue, try contacting the Taxpayer Advocate instead.  They should be able to give you the best advice about how to get the situation cleared up so that you will not continue to have this problem going forward.

Take a look at the following website to learn more about the Taxpayer Advocate and the services they provide.  

Taxpayer Advocate Service

Or, as another alternative, you can amend your 2019 return as soon as possible to include Form 5405 stating that you no longer have the home and it was sold due to foreclosure.  Then amend your 2020 and 2021 returns as well to remove Form 5405.  When you have these completed, mail them all in the same package with your 2022 tax return and a letter of explanation telling the IRS about your situation.  

@DirkStrange