The Homebuyer Tax Credit- Military Exemptions

It's Tax Time!

The new and improved First Time Homebuyer Tax Credit has caused a lot of people to buy in the previous year- many of them Military Families. Normally, if you move from this within 3 years of purchase you will owe back your $8000 or $6500 (whichever you received from the IRS). However, things are a bit different for the Military.

GOOD NEWS!

If you receive orders to PCS somewhere at least 50 miles away from your Primary Residence (the address you claimed the credit for), you DO NOT have to pay back your refund credit money! This applies whether you sell the current home or rent it out.

BAD NEWS :(

True Story- Consider this scenario that happened to a family right here at Fort Benning, GA- A soldier received orders to PCS to Fort Drum, NY. He had claimed the tax credit for buying his home, and they decided to rent it out when they moved to New York. He moved his family ahead of him, and was soon to join them when his orders were cancelled! His home at Fort Benning had already been occupied by his new tenants, so he and his family could not move back into their home. Because they no longer had orders for more than 50 miles away, and could not move back into their Primary Residence they had claimed on their taxes, they had to PAY BACK the $8000!!!

Moral of this story?- BE CAREFUL! This tax credit is great for many many people, but MAKE SURE you are PCSing before you give up your home!

In the meantime,

Happy House Hunting :)