Amend Federal Return to Include Repayment of the First-Time Homebuyer Credit

If you claimed the First-Time Homebuyer Credit in a previous year, you need to include a repayment amount on your current year return.

To enter the necessary information in TaxAct®:

  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 either Form 5405 if you disposed of the home or ceased using the home as your main home in 2020 or Worksheet if you need 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.

If you already filed your return without this information and need to include it on an amended return, follow the steps above and then see Form 1040-X - How to Create an Amended Return for further instructions.

Additional Information

The credit is not available for homes purchased in 2020. If you have claimed the credit in any year, you can access your account information using the First-Time Homebuyer Credit Account Look-up. This will provide you with your total credit amount, repayment amount, and other information. See the First-Time Homebuyer Credit overview for more information, including repayment triggers.

TaxAct will automatically determine whether Form 5405 Repayment of the First-Time Homebuyer Credit needs to be filed for your situation. If you are repaying the credit on your 2020 tax return, you are only required to file Form 5405 if:

  • You purchased your home in 2008 and;
    • You disposed of your home or you ceased using the home as your main home in 2020, or
    • You ceased using it as your main home in 2020.
  • You are repaying the credit because you purchased your home in 2015, the home was destroyed or you sold it through condemnation or under threat of condemnation in 2018, and the event occurred during the 36-month period that began on the purchase date. But see Exceptions, later.

In all other cases, you aren't required to file Form 5405. Instead, enter the repayment on Schedule 2 (Form 1040) Additional Taxes, Line 7b, or Form 1040-NR U.S. Nonresident Alien Income Tax Return, Line 59b, whichever applies. For example, you aren't required to file Form 5405 if you are making an installment payment of the credit you claimed for a home you purchased in 2008 and you owned it and used it as your main home during all of 2020. See IRS Instructions for Form 5405 for more 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.