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If you claimed the First-Time Homebuyer Credit for a home purchased in 2008, the 2020 return is the eleventh year of the 15-year installment repayment of the credit.

Any amount calculated to be repaid will appear on Line 7b of Schedule 2 (Form 1040) Additional Taxes. This will either reduce the refund on the return (the refund may become an amount due, depending on the repayment amount) or increase the amount due.

If the credit was originally claimed on a joint return, each spouse is treated as having been allowed half of the credit for purposes of repaying the credit. Thus, two Forms 5405 Repayment of the First-Time Homebuyer Credit will be produced (and printed with the return) if repaying the credit on a joint return.

To enter the repayment into the TaxAct® program:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Taxes in the Federal Quick Q&A Topics menu to expand, then click Repayment of first-time homebuyer credit.
  3. Click Form 5405 if you disposed of the home or ceased using the home as your main home or click Worksheet to make the annual repayment and the home is still your main home.
  4. Continue with the interview process to enter all of the appropriate information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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