President Barack Obama signed the Homebuyer Assistance and Improvement Act of 2010 (H.R. 5623) on July 2. The bill extends the closing date deadline to qualify for the first-time homebuyer credit under Sec. 36 from June 30, 2010, to September 30, 2010. To offset the cost of the extension, the act also includes a provision that extends the bad check penalties the IRS can impose under Sec. 6657 to electronic payments.
Sec. 36 allows a tax credit of up to $8,000 for first-time homebuyers and a credit of up to $6,500 for long-term residents of the same principal residence. However, the credits are temporary, and under Sec. 36 (before amendment by H.R. 5623), the credit was only available to qualifying homebuyers who bought a principal residence on or after April 9, 2008, and on or before April 30, 2010, or who entered into a written binding contract on or before April 30, 2010, to close on the purchase of a principal residence on or before June 30, 2010. Because of delays due to a number of reasons largely outside of their control, many qualifying homebuyers who entered into binding contracts on or before April 30 were unable to close on their residences by the original June 30 deadline.
In a news release (IR-2010-80), the IRS reminded taxpayers that special filing and documentation requirements apply to anyone claiming the homebuyer credit. The news release provides a list of these requirements.