Comments on: Refundable vs. Non-Refundable Income Tax Credits

By: ampitup

ampitup — Fri, 27 Jan 2012 02:42:57 +0000

stop complaining, you all are looking for a “credit” also known as a government hand out. you are what the republicans call moochers. get over yourselves. you cry babies are probably going to vote republican, when you are trying get the same welfare benefits you complain about.

By: JOKER

JOKER — Wed, 13 Jul 2011 03:41:51 +0000

MAYBE YOU SHOULD EXPLAIN THIS SO THOMAS CAN UNDERSTAND WHY IT’S NOT A “LOAN”.

By: wendy lena

wendy lena — Thu, 17 Feb 2011 22:17:49 +0000

i, too, am one of many taxpayers that feel they have been cheated and mislead. why are we being penalized for buying a house to soon or too late. what good for one american taxpayer should be good for all. just another way for the goverment to screw the people that pay their salarie.

By: Jan

Jan — Tue, 26 Jan 2010 02:30:52 +0000

Denise- My husband and I took advantage of the market in july 2008. We were also early buyers, like you. 28 weeks later, buyers (my sister included)were given $8,000 for free when she bought. It’s not free, though. You and I will be paying for their free-bee for years to come. I feel very ripped-off.

By: Commenter

Commenter — Mon, 18 Jan 2010 20:43:39 +0000

Bill – Your sister will get a $5,000 credit, as the tax credit is limited to 10% of the home value, or $8,000, whichever is LESS.

By: Denise

Denise — Sun, 17 Jan 2010 17:40:49 +0000

Took advantage of the program and bought a house in Sept. 2008. It’s not fair to GIVE $8000 to the late buyers and OFFER $7500 to the early buyers and then have to pay it back. We early buyers took advantage of the programs that was availible to help fix our economy and this the THANKS WE GET!!

By: Margaret

Margaret — Mon, 11 Jan 2010 21:04:06 +0000

I have been unemployed for the greater part of 2009. As a result only taxable amount of UB apply. I do own a home and as such, MTGE INR and Home taxes are written off. Would I be able to write these amounts off and receive a refund if my liability has been met by the amount of my withholding for 2009? In other words could I possibly receive a refund on the MTGE INT and home taxes???

By: Bill

Bill — Tue, 21 Jul 2009 22:16:03 +0000

My sister-in-law just bought a house for about $50,000. She only makes about $35,000/year. Would she still get 10% of the value as a refund, or would she get the whole 8,000 due to her low incom?

By: Corey

Corey — Tue, 24 Feb 2009 20:58:45 +0000

Okay after reading all of this I have a huge question. I bought my house on Jan 16th, 2009. I already filed my taxes back in january when the credit was 7500 and had to be repaid over 15 years. Now I am hearing that it is 8000 and does NOT need to be repaid. Am i stuck repaying my original plan or am i not obligated to pay that back now? So very confused, please help. Thanks.

-Corey

By: Sara

Sara — Fri, 20 Feb 2009 14:28:22 +0000

So if I got a 3500 refund for 2008, and bought a house and qualified, I would get the 8,000 on top of my usual 3,500? This seems to good to be true?

By: Justin

Justin — Tue, 17 Feb 2009 20:42:57 +0000

I saw this same article and doubted their math as well (eventually leading me to this blog). Brad, your examples look correct, I too think CNN messed up.

Looking back at the article it appears they’ve corrected the scenarios, but not the “answer.” It should now read:

“The short answer? Yes, Billings would get back the $8,000 plus what he’d overpaid. The long answer? Yes.”

By: kosmo

kosmo — Tue, 17 Feb 2009 16:49:27 +0000

Brad – I saw the same article on CNN Money (http://money.cnn.com/2009/02/1.....tm?cnn=yes) and I had to laugh.

If it worked the way CNN suggests, it would penalize people who withheld a lot in taxes. Let’s say you and I both have 10K in tax liability. You have 10K withheld ($0 refund), and I have 17,995 withheld (i.e. a $7995 refund).

Under CNN Money’s scheme, we would both get a 8K refund … $8000 in “new money” for you and $5 in “new money” for me … in spite of the fact that our tax situation (aside from withholding) is identical. Essentially, I gave the government an interest-free loan during the year, and I would be penalized for it. Huh?

I have had a couple of tax classes (I was an accounting major in college) and I would be shocked to see something this crazy implemented.

It’s safe to say that CNN Money is just wrong. Very disturbing to see a mistake of that magnitude …

By: nickel

nickel — Tue, 17 Feb 2009 03:30:43 +0000

brad: Your logic sounds correct. An $8k refundable credit should turn that $6k tax liability into a -$2k liability (in other words, a $2k net gain for you). Thus, you should get back everything you paid in plus $2k. I just dug around on CNN and found something similar to what you describe, and it looks like the author is incorrect. Keep in mind that I’m not a tax pro, but I am pretty good at math.

By: brad

brad — Tue, 17 Feb 2009 03:12:01 +0000

I keep reading all sorts of different versions of and interpretations of these refundable tax credits, and I’m hoping fivecent nickel can put this one to rest like usual.

I qualify for the $8000 first time homebuyer tax credit. I plan on applying this to my 2008 taxes. I came up with 2 obvious scenarios. I owe the Govt or I get a refund. I’ll say my Federal Tax liability is $6,000 for the year.

Scenario 1: I have $5,500 in taxes withheld from my paycheck by my employer (thus, I would owe $500). I apply the $8,000 tax credit and now I receive a $7,500 refund.

Scenario 2: I have $6,600 in taxes withheld from my paycheck from my employer (thus, I would get a $600 refund). I apply the $8,000 tax credit and now my refund is $8,600.

Is this correct logic? A CNN article explained the 2nd scenario as I would only be getting an $8,000 refund instead of $8,600. How could that be? The Tax credit would only then be basically worth $7,400 just because my employer withheld more money in scenario 2 as compared to 1. Or, is the CNN Writer just incorrect?

Thanks in advance.

By: SP

SP — Sun, 15 Feb 2009 21:25:00 +0000

At least you have the option to use the credit. I bought my home 3 months to early, so consider yourself lucky:)

By: tracy

tracy — Sat, 14 Feb 2009 19:31:29 +0000

I feel a little cheated i qualified for the $7500 tax credit but then weeks later another tax credit is approved for $500 dollars more an does not have to be repaid.

By: thomas

thomas — Thu, 12 Feb 2009 17:01:30 +0000

It should be illegal for them to call it a tax credit. If you have to pay it back, IT IS CALLED A LOAN!