TurboTax HelpTurboTax HelpIntuit

What would cause me to have to repay the first-time homebuyer credit ahead of schedule?

SOLVEDby TurboTax346Updated December 29, 2021

You'd have to repay the credit ahead of schedule, in part or in full, if:

  • You turn the home into a rental or began using it for business, rather than as your primary residence.
  • You sell the home to a related person, defined as your spouse, your ancestors (parents and grandparents), or lineal descendants (children and grandchildren), as well as your spouse's ancestors or lineal descendants.
  • You sell (or give up the home in foreclosure) to a non-related person and profited from the sale.
  • Your home is destroyed and you don't plan to acquire another one within two years of the event. You must include all remaining installments as additional tax on the tax return for the year in which the two-year period ends.
    • If your home is destroyed and you acquire (or plan to acquire) another main home within two years of the catastrophe, you'll continue to repay the installments as if nothing happened.

Certain events may reduce or eliminate repayment, like:

  • You sell your home or stop using it as your main home to fulfill U.S. government orders for a qualified official extended duty service. If you or your spouse is a member of the uniformed services, Foreign Service, or an employee of the intelligence community, you do not need to repay the credit.
  • You sell the house (or give it up in foreclosure) to a non-related person, and there was no gain on the sale.
  • You transferred the home to your ex-spouse as part of your divorce settlement (your ex is now responsible for repaying the credit).
  • The taxpayer who received the credit dies. In this case, no repayment is required. If you claimed the credit on a joint return for 2008, and your spouse dies, your spouse's remaining half of the credit doesn't have to be repaid.

Was this helpful?

You must sign in to vote, reply, or post
TurboTax Desktop BasicTurboTax Desktop BusinessTurboTax Desktop DeluxeTurboTax Desktop Home and BusinessTurboTax Desktop PremierTurboTax Live BasicTurboTax Live DeluxeTurboTax Live Full Service BasicTurboTax Live Full Service Complex IncomeTurboTax Live Full Service Complex Self-EmployedTurboTax Live Full Service DeluxeTurboTax Live Full Service PremierTurboTax Live Full Service Self-employedTurboTax Live PremierTurboTax Live Self-employedTurboTax Mobile Apps DeluxeTurboTax Mobile Apps FreeTurboTax Mobile Apps PremierTurboTax Mobile Apps Self-employedTurboTax Online DeluxeTurboTax Online FreeTurboTax Online PremierTurboTax Online Self-employed
Dynamic AdsDynamic Ads