On Nov. 6, 2009, President Barack Obama signed into law the Worker, Homeownership, and Business Assistance Act of 2009 (the 2009 Assistance Act). It includes tax relief for military and other service members.
Waiver of first-time homebuyer credit recapture
The first-time homebuyer tax credit must be paid back to the government if the home is sold (or ceases to be used as a principal residence) within three years of the purchase. A more extensive recapture rule applies to qualifying home purchases in 2008. The 2009 Assistance Act provides that the first-time homebuyer credit does not need to be paid back if, after Dec. 31, 2008, the home is sold (or ceases to be used as a principal residence) by a member of the uniformed services, a member of the U.S. Foreign Service or an employee of the intelligence community, in connection with a government order received by the individual or the individual’s spouse for qualified official extended duty.
Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the United States) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
Extension of first-time homebuyer credit for service members overseas
The first-time homebuyer tax credit was scheduled to expire on Nov. 30, 2009, but the 2009 Assistance Act extends the credit to purchases before May 1, 2010 (July 1, 2010, for taxpayers with binding contracts). For service members serving overseas, the extension is one year longer. The 2009 Assistance Act provides that for service members serving outside the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010, the purchase must occur before May 1, 2011 (July 1, 2011, for taxpayers with binding contracts). The idea behind this additional extension is to allow service members stationed overseas to take advantage of the credit when they return.
Claiming the credit
To claim the credit on your 2009 tax return, you must use Form 1040 reported on line 67 of the 2009 return). You cannot use Form 1040-EZ or 1040-A. If you have already filed your tax return, you can amend it using Form 1040-X. You must attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit and documentation showing the purchase of a home between the applicable dates. You must file a paper, not electronic, return.
If you purchased a home in 2009, you can use the December 2009 revision of Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, along with Form 1040X, Amended U.S. Individual Income Tax Return, to amend your 2008 tax return. This gives you the option of claiming the credit on either a 2009 return or an amended 2008 return. Keep in mind, however, that it is currently taking longer than normal — about 12-16 weeks — to process 2008 amended returns. Thus, you’ll likely get your refund sooner if you claim the credit on your 2009 return.
For more information see the First-Time Homebuyer Credit Questions and Answers: Claiming the Credit on Your Tax Return at www.irs.gov/newsroom/article/0,,id=218698,00.html.
Wiesbaden tax help
For assistance with claiming the First-Time Homebuyer Credit make an appointment to visit the Wiesbaden Tax Assistance Center, located in Building 1026 on Wiesbaden Army Airfield. The office has walk-in hours Monday to Thursday from 9 a.m. to 3 p.m. (open through lunch). Call mil 337-4755 to make an appointment Monday to Thursday from 9 a.m. to 4 p.m. or Friday from 9 a.m. to noon. The office is closed Friday afternoons for training.
You may also seek assistance at the 1st Armored Division Legal Assistance Office in Building 1023N on Wiesbaden Army Airfield. Hours are Monday, Tuesday, Wednesday and Friday from 9 a.m. to noon and 1-4 p.m. On Thursday the Legal Assistance Office is open from 1-4 p.m. To visit an attorney, walk-in hours are Tuesday from 9 a.m. to noon and Thursday from 1-4 p.m.
Baumholder tax help
The Baumholder Legal Assistance and Tax Offices are located on the second floor in Building 8222 on Smith Barracks. Call mil 485-1040 or civ (06783) 6-1040 for hours and more information.

Published March 5, 2010