MADISON (WKOW)--First time homebuyers are running out of time to cash in on the $8,000 tax credit, which expires at the end of November.
The IRS says the American Recovery and Reinvestment Act extended the tax credit, which has provided a tax benefit to more than 1.4 million taxpayers so far.
In Wisconsin, around 24,649 families have claimed the credit so far. This represents the number of year to date first-time homebuyer credit claims received on 2008 individual federal tax returns.
The credit of up to $8,000 is generally available to homebuyers with qualifying income levels who have never owned a home or have not owned one in the past three years.
The IRS encouraged all eligible homebuyers to take advantage of the first-time homebuyer credit but at the same time cautioned taxpayers to avoid schemes that help ineligible people file false claims for the credit.
Currently, the agency is investigating a number of cases of potential fraud and is using computer screening tools to identify questionable claims for the credit.
Because the credit is only in effect for a limited time, those considering buying a home must act soon to qualify for the credit. Under the Recovery Act, an eligible home purchase must be completed before Dec. 1, 2009. This means that the last day to close on a home is Nov. 30.
The credit cannot be claimed until after the purchase is completed. For purchases made this year before Dec. 1, taxpayers have the option of claiming the credit on their 2008 returns or waiting until next year and claiming it on their 2009 returns.
For those considering a home purchase this fall, here are some other details about the first-time homebuyer credit:
Taxpayers cannot take the credit even if they buy a main home before Dec. 1 if:
For details on claiming the credit, see Form 5405, First-Time Homebuyer Credit.