It's Payback Time For Some Who Took Homebuyer Tax Credit

The homebuyers' tax credit, enacted in 2008, was designed to jump start the rapidly declining housing market. It offered first-time homebuyers a refundable $7,500 tax credit if they bought a home.

But the tax credit isn't like ordinary credits. It must be refunded to the Internal Revenue Service (IRS) over a 15-year period. The law was amended in 2009 so that those who purchased homes that year and in 2010 don't have to return the money. But if you claimed the tax credit for a 2008 purchase, it's time to start paying it back.

You fall into this category if you claimed the credit for a home purchased that occurred after April 8, 2009 but before January 1, 2009. If you are in this category, you must make a payment to the IRS on your 2011 return.

How do you know what you need to pay? It's going to vary for each taxpayer. That's why the IRS has set up this online tool to help you determine the repayment amount for the current tax year.

Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009, 2010 or early 2011. The obligation to repay the credit arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased to be your principal residence.