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Is it too late to claim the first time home buyers tax credit?

No.

As it stands now, it officially ends on November 30, 2009 – which means if you are currently under contract and are in process of getting financing, you will still probably close in time to claim the $8,000 tax credit.

But if you haven’t picked out a house and gotten an accepted sales contract and are currently working on getting financing approved then you are probably too late.

Unless congress does something to extend and/or expand the credit.

According to the coverage of the tax credit by the Phoenix Real Estate guy:

• UPI is reporting that Senator Johnny Isakson, who has lead the charge for a home buyer tax credit in the Senate since Day 1 has reached a point of compromise. Isakson has always wanted to see the tax credit at $15K, not limited to first time buyers, and the income limits increased. According to UPI, Isakson will introduce an amendment for a six month extension rather than 12 month and keep the credit at $8,000. He will still try to expand it to all primary residence buyers and raise the income limit to $150K for an individual or $300K for a couple.
• The Wall Street Journal reports that Isakson is “cautiously optimistic” that an extension – with procedural safeguards attached to stem the ever-growing tide of fraudulent credit claims – can move ahead in the Senate next week.
• CNBC is reporting that Senate Majority Leader Harry Reid is making a counter-proposal to Isakson’s tax credit extension that will phase out through 2010:
  

  Under Reid’s plan, the $8,000 tax credit would be phased out over time, dropping to $6,000 in April, $4,000 in July, and $2,000 in October, before expiring at the end of 2010. The plan could come to a vote as early as next week.

What actually happens as to whether or not the tax credit will be extended and/or expanded will be decided in the coming weeks – and many people will be anxiously waiting the answer… except for those people who have already taken advantage of the credit and bought a house!

Justin McHood recently wrote about whether or not Congress would extend the federal tax credit for home buyers. Many people have legitimately benefited from being able to claim the credit on their income tax returns, and there have been calls to extend it to more Americans.

However, government investigators say over 100,0000 taxpayers have fradulently filed for the credit. About 19,000 people who filed for a total of $139 million in tax credits didn’t even buy a home, while about 74,000 filed $500 million in claims even though they didn’t qualify as a first-time homeowner, according to an article in the Wall Street Journal.

At least one of the filers was only 4 years old, J. Russell George, the Treasury inspector general for tax administration, told Congress this week.  The names of more than 500 people under 18 were on applications for the tax credit. In most of those cases, parents of the children filed the claims because their incomes were too high to claim it themselves.

So what happens to the people who attempted to commit fraud by filing the claims? They could be prosecuted and their tax preparers could face criminal charges.

While some opponents of the tax credit may see this as another reason not to extend the program, others say that more safeguards should be put in place to deter fraud if the program is continued.

One of the more popular topics relating to housing lately is whether or not Congress will expand the federal tax credit for new home buyers.

Yesterday, executives from the The Mortgage Bankers Association testified before Congress that they needed to “shore up” the housing market and could do so by extending the new home buyer tax credit, extending loan limit increases, and a few other items that will help hopefully encourage lenders to lend more money.

According to an MBA press release:

MBA Chief Economist Jay Brinkmann testified that the housing market and the overall economy are “inextricably linked,” and that while in past recessions housing has driven the recovery, this time the housing market will only regain strength as part of an overall economic recovery.

“While our economy is showing signs of recovery, and a number of local housing markets appear to be reaching the bottom, our long-term recovery will be dependent on the creation of jobs,” Brinkmann said. “As we begin to see new employment opportunities, consumer confidence and spending will also return, and a new wave of home buyers will begin to absorb the oversupply of homes.”

One of the hot topics with many people who are considering buying a home is whether or not the 8000 tax credit will be extended – on that topic, here is what Mr. Brinkman had to say:

Brinkmann emphasized that the Internal Revenue Service reported that more than 1.4 million taxpayers have benefited from the first-time home buyer tax credit enacted by Congress as part of the Housing and Economic Recovery Act of 2008, but set to expire Nov. 30.

MBA supports extending eligibility to all primary residence home buyers; increasing the tax credit to up to 10 percent of the home purchase price up to a maximum of $15,000; requiring the tax credit to be repaid in certain instances , such as when a residence is sold within three years; and allow taxpayers to claim and receive the tax credit immediately and facilitate the IRS sending funds claimed by the taxpayer directly to the settlement agent for use in the purchase mortgage transaction.

While it isn’t official yet, one thing is certain – there will be plenty of discussion as to whether or not the new home buyer tax credit will be extended – and possibly expanded.